Fed's Waller calls for interest cut by July-end
Speaking at a New York University event on Friday morning, Waller said that data still points to ongoing economic growth, but at a slower pace - reinforcing the need for monetary easing.
Moreover, inflationary pressures stemming from the tariffs imposed by President Donald Trump's administration are likely to be temporary. The Fed can look past them and instead focus on broader economic trends, Waller added.
Waller pointed out that the current interest rate range of 4.25% - 4.5% remains above the estimated neutral level of around 3%, and said that if growth continues to slow and inflationary pressures remain contained, he would support further gradual rate cuts in future meetings.
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But at the same time, Congress hit the brakes on one of its own priorities, legislation imposing steep sanctions on Russia over its war on Ukraine, after Trump announced he was allowing President Vladimir Putin an additional 50 days to negotiate a peace deal, dashing hopes for a swifter end to the conflict. This past week, Congress was tested anew, delivering on Trump's request to rescind some $9 billion that lawmakers had approved but that the administration wanted to eliminate, including money for public broadcasting and overseas aid. It was a rare presidential request, a challenge to the legislative branch's power of the purse, that has not been used in decades. The pressure on Republicans is taking its toll 'We're lawmakers. We should be legislating,' said a defiant Sen. Lisa Murkowksi, R-Alaska, as she refused to support the White House's demand to rescind money for National Public Radio and others. 'What we're getting now is a direction from the White House and being told, 'This is the priority. We want you to execute on it. We'll be back with you with another round,'' she said. 'I don't accept that.' Congress, the branch of government the Founding Fathers placed first in the Constitution, is at a familiar crossroads. During the first Trump administration, Republicans frightened by Trump's angry tweets of disapproval would keep their criticisms private. Those who did speak up — Liz Cheney of Wyoming in the House and Mitt Romney of Utah in the Senate, among others — are gone from Capitol Hill. One former GOP senator, Jeff Flake of Arizona, who announced in 2017 during Trump's first term that he would not seek reelection the next year, is imploring Republicans to find a better way. 'The fever still hasn't broken,' he wrote recently in The New York Times. 'In today's Republican Party, voting your conscience is essentially disqualifying.' Seeking a 'normal' Congress But this time, the halls of Congress are filled with many Republicans who came of political age with Trump's 'Make America Great Again' movement and owe their ascent to the president himself. Many are emulating his brand and style as they shape their own. A new generation of GOP leaders, Johnson in the House and Senate Majority Leader John Thune, have pulled closer to Trump. They are utilizing the power of the presidency in ways large and small — to broker deals, encourage wayward lawmakers to fall in line, even to set schedules. Johnson, R-Louisiana, has openly pined for what he calls a 'normal Congress.' But short of that, the speaker relies on Trump to help stay on track. When Republicans hit an impasse on cryptocurrency legislation, a Trump priority, it was the president who met with holdouts in the Oval Office late Tuesday night as Johnson called in by phone. 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The senator raised concerns about steep cuts to hospitals, but the president threatened to campaign against him. Tillis announced he would not seek reelection in 2026. Sen. Susan Collins, R-Maine, voted against that bill and the rescissions package despite Trump's threat to campaign against any dissenters. One Republican, Rep. Thomas Massie of Kentucky, appears to be pressing on, unphased. He recently proposed legislation to force the administration to release the Jeffrey Epstein files, something the president had been reluctant to do. 'Nowhere in the Constitution does it say that if the president wants something, you must do it,' said Sen. Brian Schatz, D-Hawaii, in a Senate speech. 'We don't have to do this. We don't have to operate under the assumption that this man is uniquely so powerful.'
