09:57 AM EDT, 07/17/2024 (MT Newswires) -- The incoming data will determine the path of monetary policy, Federal Reserve Governor Christopher Waller said Wednesday at Kansas City Fed event, noting that there are multiple paths.

"I believe current data are consistent with achieving a soft landing, and I will be looking for data over the next couple months to buttress this view," Waller said. "So, while I don't believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted."

The most likely scenario, Waller expects, is a one where the inflation data continue to be "uneven" but consistent with progress in inflation, meaning a rate cut in the "near future" is uncertain and matter of timing.

A more optimistic possibility is that the incoming inflation data remain favorable and would allow for a rate cut in "the not-too-distant future." Waller said that the sees a "significant but not high probability" of this outcome.

The third possibility, which Waller said is less likely but still possible, is that inflation rebounds in second half of the year and suggests that progress toward the inflation goal is less sustainable.

"These scenarios highlight that the data will influence how my confidence in inflation returning sustainably to 2% could evolve over time," Waller said. "And this will then influence my view of the appropriate path of policy. This all goes to say that my view of the appropriate path of policy is data dependent."