Federal Reserve official signals potential December rate cut

The Federal Reserve is considering another interest rate cut in December, according to Christopher Waller, a member of the Federal Reserve Board of Governors.

Speaking at an event on Monday, Waller expressed optimism about inflation trends, noting that the annual inflation rate is steadily approaching the central bank’s 2% target. “I lean toward supporting a cut to the policy rate at our December meeting,” he said, while emphasizing that the final decision would rely on forthcoming economic data.

The Fed’s next move would follow a series of recent rate adjustments. In November, the central bank reduced its benchmark rate by 25 basis points to a target range of 4.5% to 4.75%. This marked the second rate cut since the coronavirus pandemic began, underscoring a shift from earlier tightening policies.

In September, the Fed exceeded expectations by slashing rates by 50 basis points, signaling a more aggressive approach to bolstering the economy amid signs of cooling inflation. Recent data showed the annual inflation rate at 2.6% in October, down from 2.4% in September.

With inflation trending lower, economists and market observers are closely watching the Fed’s December meeting for signals of a more accommodative monetary stance heading into 2024.