Fed’s Waller Says Path To Rate Cuts In 2025 Visible But Hinges On Trump’s Tariff Wars

Federal Reserve Governor Christopher Waller said on Thursday that the path to rate cuts in 2025 is still visible, but it hinges on how President Donald Trump shapes his tariff war.

In an interview with Fox Business, Waller said that if Trump’s tariff number settles in the lower end of the range compared to where the President started earlier in the year, the path to rate cuts looks good.

"If we can get the tariffs down close to the 10% and then that's all sealed, done and delivered somewhere by July, then we're in good shape for the second half of the year, and then we're in a good position to kind of move with rate cuts through the second half of the year," Waller said.

The Fed official’s remarks come as Chair Jerome Powell says the central bank is focused on keeping inflation expectations anchored. Powell had expressed surprise at Trump’s tariffs, saying they were higher than expected.

President Trump has paused his “Liberation Day” tariffs for 90 days. For China, the tariff rate currently stands at 30% for many goods, and levies up to 245% have been paused for a 90-day period.

Amid this, the Trump administration has announced a trade deal with the U.K., and deals with other trading partners are expected.

Earlier, JPMorgan Chase CEO Jamie Dimon backed Powell’s wait-and-watch approach to rate cuts. The Fed Chair had said that he would wait for the impact of Trump’s tariffs on inflation and growth to become visible before opting for another rate cut.

The Fed’s benchmark interest rates are currently in the 4.25% to 4.50% range.

Meanwhile, the SPDR SPY 500 ETF (SPY), which represents the S&P 500 index, was up by 0.33% at the time of writing.

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