Fed Governor Miran wants a half-point cut this month, while Waller backs another quarter-point move

Core Viewpoint - The Federal Reserve is considering interest rate cuts in response to a weakening labor market and geopolitical tensions, with differing opinions among its governors on the pace of these cuts [1][2]. Group 1: Interest Rate Perspectives - Governor Stephen Miran advocates for a half-percentage-point interest rate cut at the upcoming Federal Reserve meeting [1]. - Governor Christopher Waller supports a more moderate quarter-percentage-point reduction, aligning with the broader consensus within the Fed [2][3]. - The Federal Open Market Committee is expected to pursue further rate reductions, although the extent remains uncertain [2]. Group 2: Economic Indicators - Waller emphasizes the need to balance solid GDP growth against a softening labor market when considering future rate cuts [3]. - He identifies two potential economic scenarios: one where GDP continues to rise and the labor market improves, necessitating caution in rate cuts, and another where economic conditions worsen, potentially requiring cuts of up to 1.25 percentage points [4]. Group 3: Inflation Concerns - Waller warns against hastily cutting rates, which could reignite inflationary pressures and undermine progress made in controlling inflation [5]. - He notes that the labor market is showing signs of distress, indicating the need for readiness to act based on forthcoming data [5].