Waller made evaluations on the economic outlook in his speech at the Brookings Institution. Stating that he believes that monetary policy is set correctly, Waller said that the policy is restrictive and should continue to put downward pressure on demand in order to continue to see moderate inflation readings.
Waller stated that he believes that they are on the right track for inflation to reach the 2 percent target and said, "I believe that the Federal Open Market Committee (FOMC) can lower the federal funds rate target range this year as long as inflation does not rise and remain high."
Noting that time will tell whether inflation will maintain its recent course and whether this will happen while the labor market is still performing above expectations, Waller noted that the data in the last few months allows the Committee to consider lowering the policy rate in 2024.
WARNING THAT POLICY CHANGES SHOULD BE CAREFULLY CALIBRATED AND NOT RUSHED
Waller stated that concerns about the sustainability of data trends require changes in the policy course to be "carefully calibrated and not rushed".
Emphasizing that the timing and number of rate cuts in 2024 will depend on incoming data, Waller said, "When the time comes to start lowering rates, I believe they can and should be lowered methodically and carefully."
Waller said that in this cycle, with economic activity and labor markets in good shape and inflation gradually falling to 2 percent, he sees no reason to move as fast as in the past or to cut rates as quickly.
Christopher Waller emphasized that policy setting should also be done more carefully to avoid excessive tightening in the future.