A Fed December rate cut now has a powerful advocate inside the central bank, with Governor Christopher Waller publicly backing a move to lower borrowing costs next month and hinting that policy decisions could soon shift to a more cautious, meeting-by-meeting pace.
Key Points
Speaking Monday on the Fox Business Network, Waller said his priority is the labor market and that concern is leading him to support a cut at the Federal Reserve’s upcoming Dec. 9-10 policy meeting.
“My concern is mainly labor market, in terms of our dual mandate,” he said. “So I’m advocating for a rate cut at the next meeting.”
Waller added that, after December, officials may no longer feel compelled to move in a pre-set pattern and could instead judge each gathering on its own merits.
“You may see more of a meeting-by-meeting approach once you get to January,” he said.
Waller Lays Out Case for a Fed December Rate Cut
Waller’s explicit support for a Fed December rate cut puts a spotlight on the central bank’s employment goal at a time when investors and policymakers are debating how far to go after two straight reductions in September and October.
He said recent figures point to ongoing strain in the labor market, reinforcing his argument that another dose of easing is appropriate. While he did not spell out a precise trajectory for rates beyond December, he made clear that the jobs side of the Federal Reserve’s dual mandate is driving his current stance.
Waller also signaled he does not expect a rapid turnaround in hiring or unemployment before year-end. He indicated that, in his view, labor conditions are unlikely to change dramatically over the next “six weeks to eight weeks,” the window that covers the December policy gathering.
That assessment suggests Waller sees limited risk that an additional cut next month would fall behind the data, even as he acknowledged that the picture could look more complicated early next year.
Weak Labor Market and a Divided Central Bank
Waller’s comments land at a moment when policymakers appear sharply split over whether to move again so soon after the September and October cuts. According to futures contracts, investors currently place the odds of another reduction at the Dec. 9-10 meeting at about 70%.
Some officials have expressed reservations about pushing too quickly, arguing that earlier moves should be given time to filter through the economy. Waller, by contrast, is emphasizing what he sees as persistent softness in the labor market and the need to respond in line with the central bank’s employment and inflation objectives.
He framed his stance squarely around that dual mandate, saying his “concern is mainly labor market” and indicating that he does not anticipate a sudden strengthening in hiring that would render a December move premature.
The split inside the institution means Waller’s public advocacy could carry extra weight as investors try to gauge the balance of opinion ahead of the final meeting of the year.
Data Flood Could Complicate the January Decision
While Waller is confident enough to back a Fed December rate cut, he was more cautious about what should happen after that, pointing to a wave of delayed economic statistics that will arrive between the December and January meetings.
He said that once those reports are in hand, choices could become “a little trickier,” underscoring why he favors shifting to a meeting-by-meeting framework at the start of the new year.
Key employment figures for October and November are scheduled to be released on Dec. 16, after the December policy decision. That will be followed on Dec. 18 by November data on consumer prices.
Those releases could reshape the narrative around growth, inflation, and jobs just as officials begin preparing for their January meeting.
“If it suddenly shows a rebound in inflation or jobs, or the economy’s taking off, then it might give concern,” Waller said, outlining one scenario that could argue against further easing.
Even so, he reiterated that he does not expect the labor market to “turn around” in such a short window, reinforcing his view that current weakness justifies acting in December while leaving options open for what comes next.
Markets Already Lean Toward a Fed December Rate Cut
Financial markets had already been leaning toward a Fed December rate cut before Waller spoke, with futures pricing implying roughly a 70% probability of a move at the Dec. 9-10 meeting.
His televised remarks, delivered in direct and unambiguous terms, align with that market view and give investors a clearer sense of at least one governor’s position heading into the final stretch before the decision.
The combination of a high implied probability in futures and visible disagreement among policymakers sets the stage for a closely watched meeting, where any shift in tone or vote breakdown will be parsed for clues about how firmly the committee is coalescing around Waller’s preferred course.
Waller’s Rising Profile in the Race to Succeed Powell
Waller’s policy stance is drawing attention in its own right, but it also comes as his broader profile is rising in Washington.
He is currently under consideration by the Trump administration as a potential candidate to succeed Jerome Powell as chair of the Federal Reserve next year, according to people familiar with the process cited in the original reporting that accompanied his remarks.
Waller confirmed he recently sat down with Treasury Secretary Scott Bessent, who is leading the interview process for the administration.
He described the conversation, which took place about 10 days ago, as a “great meeting” and said the two quickly found common ground.
“He and I seem to hit it off very well, talking about economics, the economy, financial markets,” Waller said, portraying the discussions as substantive and focused on policy rather than politics.
“They’ve never been political. They’re straight about economics, and that’s just been a great time, for me to sit and talk with him,” he added.
That characterization suggests Waller sees the vetting process as a chance to showcase his economic thinking and market views at a moment when his public comments on interest rates are drawing fresh scrutiny.
What Waller’s Comments Signal for the Fed Path
Taken together, Waller’s interview paints a picture of a policymaker who is:
- Clearly in favor of a Fed December rate cut,
- Increasingly focused on labor market softness, and
- Eager to move away from any perception that the central bank is on a rigid, pre-committed path.
By endorsing another reduction now while emphasizing a more cautious, data-dependent approach starting in January, Waller is trying to balance near-term support for the economy with flexibility for the months ahead.
His repeated references to upcoming employment and inflation data highlight the importance he places on the flood of information arriving in mid-December. Those reports will land too late to change the outcome of the December meeting but early enough to shape the debate over whether additional action is warranted in the new year.
For markets, businesses, and households, that means attention will remain locked on two fronts: the decision at the Dec. 9-10 meeting and the jobs and price figures released just afterward.
Conclusion
Christopher Waller’s public push for a Fed December rate cut marks one of the clearest signals yet from inside the central bank about how at least one governor wants to proceed after back-to-back reductions in September and October.
By centering his argument on a still-weak labor market and calling for a shift to meeting-by-meeting decisions starting in January, Waller is both reinforcing current market expectations and underscoring the uncertainty that could follow once a wave of delayed economic reports hits.
His parallel role as a leading candidate to potentially succeed Jerome Powell adds another layer of interest to his views, ensuring that investors and policymakers alike will be listening closely as the December meeting approaches and the next round of data begins to arrive.
FAQ’s
Why is Christopher Waller supporting a Fed December rate cut?
Christopher Waller says his main concern is the labor market, part of the Fed’s dual mandate. He believes recent data show continued weakness in jobs, which in his view justifies a rate cut at the December meeting.
How likely is a Fed December rate cut according to markets?
Futures contracts suggest investors see about a 70% chance of a rate cut at the Fed’s Dec. 9–10 policy meeting. Waller’s public backing reinforces those market expectations.
What economic data could affect Fed decisions after December?
Key reports due after the December meeting include October and November employment data on Dec. 16 and November consumer price data on Dec. 18. Waller says this “flood” of delayed data could make the January decision trickier.
How do Waller’s comments tie into his chances to succeed Jerome Powell?
Waller is under consideration by the Trump administration as a possible successor to Jerome Powell as Fed chair. His clear views on a December cut and data‑dependent policy could shape how officials assess his approach to leading the Fed.
