The Federal Reserve should carefully consider future interest rate reductions given that the U.S. economy is showing signs of strength, according to Christopher J. Waller, member of the bank’s board of governors.
Last month, the Fed cut interest rates by 50 basis points, pushing it down to a range of between 4.75 percent and 5 percent. Officials expect to implement an additional 50-point cut this year. During an Oct. 14 Federal Open Market Committee conference, Waller pointed out that recent economic data have exceeded expectations.
“Most recently, we have seen upward revisions to GDI, an increase in job vacancies, high GDP growth forecasts, a strong jobs report, and a hotter-than-expected CPI report. This data is signaling that the economy may not be slowing as much as desired,” Waller said. “While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting.”…