Fed Governor Waller: March Interest Rate Decision Depends on Employment Data

Labor Data to Be the Deciding Factor Federal Reserve Governor Christopher Waller stated that whether he supports an interest rate cut at the Federal Open Market Committee (FOMC) meeting on March 17-18 will depend on labor market data to be released in early March.
Speaking at a National Association for Business Economics event in Washington, Waller noted that if February data indicates that downside risks have diminished, similar to January's report, it might be appropriate to keep interest rates steady.
Conversely, Waller argued that a 25-basis-point cut would be necessary if January's positive data is revised downward or if new data signals weakening.
This highlights that the Fed's data-dependent policy strategy is at a critical juncture.
Probabilities Split Evenly Waller, who voted against the decision to keep rates steady in January in favor of a quarter-point cut, evaluated the current situation.
"Assuming core inflation continues to approach our 2 percent target, the key to determining the appropriate policy will be my view on the labor market," Waller said.
"As of today, I consider these two possible outcomes to be a fifty-fifty probability." Data Reliability and Revisions While Waller welcomed the stronger-than-expected January employment report, he expressed concerns that the data might contain "more noise than signal." He specifically pointed out that data revisions for 2025 showed net employment growth was close to zero, emphasizing the need for clearer data to make a sound decision.
The U.S.
Bureau of Labor Statistics is scheduled to release the highly anticipated February employment data on March 6.