Fed Governor Waller: "I Support a December Rate Cut... I Am the Right Candidate for Next Chair"

Fox News Interview
"Met with Bessent ten days ago"

Christopher Waller, a Fed Governor who is considered a leading candidate for the next Chair of the Federal Reserve, has expressed his support for a rate cut in December. He also indicated that he sees himself as a suitable candidate for the position, as the selection process for the next Fed Chair is currently underway.

Christopher Waller, Fed Governor.

In an interview with Fox News on the 24th (local time), Governor Waller stated, "My main concern is the labor market, which is related to our dual mandate," adding, "That is why I am advocating for a rate cut at the next meeting."

He predicted that, with the end of the federal government shutdown (Shut Down·temporary suspension of work), key economic indicators will be released as usual from next year, saying, "Once we enter January, a meeting-by-meeting approach (based on this data) could become even clearer." This implies that the Federal Open Market Committee (FOMC) will increasingly make monetary policy decisions in real time, based on the latest statistics available at each meeting.

The market currently reflects an 80.9% probability that the Fed will cut the benchmark interest rate, currently at 3.75-4.0% per annum, by 0.25 percentage points at the regular FOMC meeting scheduled for December 9-10. The probability of holding rates steady is 19.1%. However, within the Fed, there are differing views on the need for an additional rate cut within the year, following two consecutive cuts in September and October.

Governor Waller explained that, amid recent weakness in employment indicators and a series of delays in key statistical releases due to the shutdown, the monetary policy decision in January next year "could become more challenging." The employment reports for October and November will be released on the 16th of next month, and the November Consumer Price Index (CPI) will be released on the 18th of next month. All of these will be announced after the December FOMC.

He said, "If there is a sudden rebound in inflation or employment, or if there are signs that the economy is taking off (growing) faster than expected, concerns may arise." However, he also predicted, "I do not expect the labor market to reverse (upward) within the next 6 to 8 weeks."

Governor Waller is being mentioned as a candidate to succeed Jerome Powell, whose term as Fed Chair ends in May 2026. About ten days ago, he revealed that he had met with Treasury Secretary Scott Bessent, who is leading the selection process for the next Fed Chair, saying, "They are looking for someone with the qualifications, experience, and knowledge of the role, and I believe I fit that profile." He added, "We had a good conversation about the economy and financial markets, and it went well," and, "It was a good time focused on the economy without political considerations."

Alongside Governor Waller, other prominent candidates for the next Fed Chair include Kevin Hassett, Chair of the White House National Economic Council (NEC), and Kevin Warsh, former Fed Governor. Previously, Secretary Bessent stated that President Donald Trump is expected to nominate the next Fed Chair before Christmas, after interviewing three candidates following the Thanksgiving holiday.