Federal Reserve Board Governor Christopher J. Waller, speaking at the National Association for Business Economics’ Economic Policy Conference, argued that monetary policy should look through tariff-driven inflation and said the Federal Open Market Committee’s 17–18 March meeting could plausibly result in either holding the policy rate steady or cutting it by 25 basis points, depending on whether incoming labor-market data confirm a genuine improvement. Waller recapped that the FOMC held rates steady at its January meeting after three 25-basis-point cuts since September, and he dissented in favor of another cut because he saw labor-market downside risks alongside underlying inflation running close to 2 percent. He described the January employment report as a notable upside surprise but cautioned it may contain “noise,” citing downward revisions that left 2025 job growth at 181,000 (about 15,000 per month) and the possibility of further downward benchmarking. He also noted that January job gains were concentrated in health care and construction, and that alternative indicators diverged materially from the official estimate, including ADP’s 22,000 private-sector jobs estimate, Revelio’s 3,000 estimate, and 108,000 layoff announcements tracked by Challenger Gray and Christmas. On inflation, he cited January core consumer price index inflation of 0.3 percent month-on-month and 2.5 percent year-on-year and estimated January personal consumption expenditures inflation at around 2.8 percent year-on-year (core about 3 percent), while attributing much of the recent firmness to temporary tariff effects; he said a Supreme Court ruling overturning many tariffs was unlikely to change his policy view given his approach to “look through” tariffs. He said his assessment ahead of the March meeting would hinge on forthcoming data, particularly the February employment report due 6 March and the February CPI report due 11 March. If February confirms stronger hiring and continued progress toward 2 percent inflation, he could support a pause, while a reversal or revision of January’s strength would reinforce the case for a 25-basis-point cut.
Federal Reserve Board 2026-02-23
Federal Reserve Board Governor Waller calls March rate decision a coin flip amid uncertainty over January job gains
Federal Reserve Board Governor Christopher J. Waller, at the National Association for Business Economics’ Economic Policy Conference, suggested the Federal Open Market Committee's March meeting could hold the policy rate steady or cut it by 25 basis points, contingent on labor-market data. Waller highlighted January's mixed employment signals and noted inflation's temporary tariff effects. His decision will depend on February employment and CPI data.