Monday, July 7, 2025

Future Rate Cuts Could Slow as U.S. Economy Beats Expectations, Says Fed’s Waller

Yonhap News Agency

In September, the U.S. Federal Reserve (Fed) lowered interest rates by 0.5%, signaling a potential slowing of future rate cuts.

On Monday, CNBC reported that Federal Reserve Governor Christopher Waller, speaking at a conference at Stanford University, suggested that the U.S. economy is performing better than anticipated, leading the Fed to reconsider the pace of future rate cuts.

Waller highlighted that recent data on employment, inflation, GDP, and income indicate that the U.S. economy is not cooling as much as expected. He cautioned that while the Fed should avoid overreacting to the latest figures, it will need to be more cautious in its monetary policy than the September Federal Open Market Committee (FOMC) meeting.

The Fed, which raised rates 12 times from 2022 through last year due to rapid inflation, lowered the rate by 0.5 percentage points during the September FOMC meeting, bringing it to a range of 4.75% to 5%.

Regarding the Fed’s indication that it might cut rates by 0.5 percentage points at each of the two remaining FOMC meetings this year, Waller stated that this does not imply a specific direction for interest rates.

Waller reaffirmed his belief that the Fed will gradually lower rates next year despite these short-term considerations. He also pointed to revised second-quarter GDP income (GDI) growth of 3.4% and a savings rate of 5.2%, both of which suggest that the U.S. economy remains stronger than expected, with few signs of an imminent slowdown.

Hot this week

Tesla Sales Keep Slipping, But Stock Still Jumps Nearly 5%

Tesla's vehicle sales fell 13.5% year-on-year in Q2, with deliveries below market expectations, but stock surged nearly 5%.

S&P and Nasdaq Hit New Highs Ahead of July 4th Holiday

The New York stock market showed mixed results as the Dow dipped while the S&P 500 and Nasdaq hit record highs ahead of Independence Day.

Trump Rules Out Tariff Extension, Warns Japan Could Face 35% Rates

Trump announces no extension on tariff suspension, warns Japan tariffs could rise to 30-35% amid uncertain trade negotiations.

Oil Prices Rebound as Trump Plans to Refill U.S. Reserves

Oil prices rebound as Trump plans to replenish the Strategic Petroleum Reserve, boosting demand expectations amid positive economic indicators.

Nvidia Keeps Breaking Records—Is the $4 Trillion Club Next?

The New York stock market hits new highs, driven by AI stocks like Nvidia, while Tesla faces declines amid criticism of tax cuts.

Topics

Tesla Sales Keep Slipping, But Stock Still Jumps Nearly 5%

Tesla's vehicle sales fell 13.5% year-on-year in Q2, with deliveries below market expectations, but stock surged nearly 5%.

S&P and Nasdaq Hit New Highs Ahead of July 4th Holiday

The New York stock market showed mixed results as the Dow dipped while the S&P 500 and Nasdaq hit record highs ahead of Independence Day.

Trump Rules Out Tariff Extension, Warns Japan Could Face 35% Rates

Trump announces no extension on tariff suspension, warns Japan tariffs could rise to 30-35% amid uncertain trade negotiations.

Oil Prices Rebound as Trump Plans to Refill U.S. Reserves

Oil prices rebound as Trump plans to replenish the Strategic Petroleum Reserve, boosting demand expectations amid positive economic indicators.

Nvidia Keeps Breaking Records—Is the $4 Trillion Club Next?

The New York stock market hits new highs, driven by AI stocks like Nvidia, while Tesla faces declines amid criticism of tax cuts.

Trump’s Trade Wars Hit Hard: Dollar Sinks Over 10%

The U.S. dollar has dropped over 10% this year, raising concerns about its status as the primary reserve currency due to Trump's policies.

With 95% AI Accelerator Market Share, Nvidia’s Growth Story Isn’t Over

Nvidia's stock surges past $3.8 trillion market value, poised to become the first company to reach $4 trillion amid strong AI market dominance.

Trump’s Trade Tactics: Letters to All Nations on Tariffs

Trump plans to end the grace period for tariffs, sending letters outlining trade deficits and imposing tariffs on imports.

Related Articles