09:26 AM EDT, 10/16/2025 (MT Newswires) -- Based on current data, the Federal Open Market Committee should continue to ease monetary policy, Federal Reserve Governor Christopher Waller said Thursday at the Council on Foreign Relations, but he cautioned that a lack of government data and conflicts in the data that are available suggest moving carefully.

"Based on what I know today, I support continued easing of monetary policy from its current setting, which I judge is moderately restricting aggregate demand and economic activity," Waller said. "But I also see a conflict right now between data showing solid growth in economic activity and data showing a softening labor market."

The two conflicting movements mean that the labor market will either need to pick up to match economic activity or economic growth needs to slow to match the softer labor market - and it is unclear which will happen.

"Since we don't know which way the data will break on this conflict, we need to move with care when adjusting the policy rate to ensure we don't make a mistake that will be costly to correct," Waller said. "I believe that how that process plays out in the coming months will have a significant impact on the path of monetary policy."

Waller said that if economic growth accelerates and the labor market recovers, the FOMC can move more slowly to lower rates toward a neutral setting that he suggested was 100 to 125 basis points below the current level.

"What I would want to avoid is rekindling inflationary pressure by moving too quickly and squandering the significant progress we have made taming inflation," Waller said.

Conversely, if the labor market slows faster than expected, the FOMC can move more quickly toward that neutral rate.

"The labor market has been sending some clear warnings lately, and we should be ready to act if those warnings are validated by what we learn in the coming weeks and months," Waller said.