Fed's Waller signals interest rate cut

Fed Governor Christopher Waller said the Fed could start cutting rates if inflation continues to fall over the next three to five months. He said he was encouraged by the recent slowdown in economic activity, which could suggest that the central bank’s policy is tight enough to control inflation, which is still very high. “I have increasing confidence that policy is now well positioned to slow the economy and get inflation back to 2%, and I am also reasonably confident that it can do that without a sharp increase in the unemployment rate, which is currently 3.9%,” Waller said on Tuesday. “If inflation continues to decline, we could start cutting policy rates for another few months … three months, four months, five months … simply because inflation is low. This has nothing to do with trying to save the economy. This is consistent with every policy rule. There’s no reason to say we’re going to keep it really high,” he added. Policymakers left interest rates unchanged for a second straight meeting earlier this month at a 22-year high. Recent economic reports have supported claims by Fed watchers that the central bank has stopped raising interest rates.