Fed’s Waller Signals Closer to Rate Cuts but Not Yet

Two months ago, Fed Governor Waller suggested a rate cut might not be necessary before December. This Wednesday, he said recent data shows progress in reducing inflation, hinting he wants to see "more evidence" that inflation is on a sustained downward path.

“Fed’s Messenger” Nick Timiraos interpreted that Williams suggested the Fed is nearing a rate cut but is not ready yet, implying no rate cut in July but possibly considering it in September.

The Fed's Beige Book reported that more regions saw flat or declining economic activity, with weaker consumer purchasing power and a pessimistic outlook. Wage growth slowed in several regions, with overall price increases remaining moderate. The Beige Book also highlighted AI-driven data center investment expansion as a bright spot.