Federal Reserve officials Christopher Waller and Michelle Bowman are pushing back against the central bank’s decision to hold interest rates steady, citing rising risks to the labor market and inflation. The two governors, who voted against keeping rates unchanged this week, want a quarter percentage point reduction in the federal funds rate.
Waller argued that waiting to cut rates poses significant risks to the economy, particularly with tariffs having only a temporary impact on inflation. He suggested a gradual 1.5 percentage point cut, implemented at a slow pace as the Fed monitors impacts from policy easing.
Bowman also backed gradual cuts, saying tariffs are having limited effect on prices and that without them, the Fed’s key inflation measure would be below 2.5%. She cautioned that delaying action could lead to a deterioration in the labor market and further slowing of economic growth.
The pair’s statements reflect a “healthy and robust discussion” among Fed officials, with Waller noting that there are different views on interpreting incoming data and using economic arguments to predict the impact of tariffs. However, they also emphasized the need for a more proactive approach to policy easing.
Their dissenting views come amid growing criticism from President Donald Trump, who has urged the Fed to cut rates by as much as 3 percentage points lower. The Fed’s key interest rate-setting committee voted 9-2 in favor of holding rates steady, citing concerns over inflation and labor market stability.
Source: https://www.cnbc.com/2025/08/01/fed-governors-bowman-waller-explain-their-dissents-say-waiting-to-cut-rates-threatens-economy.html