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Fed's Waller says weak job market justifies rate cut in December
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Fed's Waller says weak job market justifies rate cut in December
Nov 17, 2025 1:03 PM

WASHINGTON (Reuters) -The data available during the recent U.S. government shutdown shows the job market near stall speed, with state unemployment claims rising slightly, layoff numbers increasing, and no evidence of building wage pressures, facts that warrant another quarter-percentage-point interest rate cut when the U.S. central bank meets next month, Federal Reserve Governor Christopher Waller said on Monday.

"The labor market is still weak and near stall speed," Waller said in remarks prepared for delivery to an economists' group in London. Meanwhile, inflation, once the likely temporary impact of tariffs is excluded, "is relatively close" to the Fed's 2% target, Waller said, while economic growth has likely slowed.

"I am not worried about inflation accelerating or inflation expectations rising significantly," Waller said. "My focus is on the labor market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data in the next few weeks would change my view that another cut is in order" when the Fed meets on December 9-10.

The 43-day federal government shutdown delayed the release of core economic data, including the September jobs report that is due to be released on Thursday.

Waller, a candidate to replace Fed Chair Jerome Powell in the central bank's top job next year, said the central bank was not, as some of his colleagues have analogized, "in a fog" that requires it to delay rate cuts until there was more clarity.

"We have a wealth of private and some public-sector data that provide an imperfect but perfectly actionable picture of the U.S. economy," he said, including information from private sources like payroll processor ADP, state government unemployment claims, and surveys from groups like the Conference Board and the University of Michigan.

He said the drop in consumer sentiment and stress on families whose budgets are stretched by housing and other major costs point to slower economic growth.

"I worry that restrictive monetary policy is weighing on the economy, especially about how it is affecting lower- and middle-income consumers," Waller said. "A December cut will provide additional insurance against an acceleration in the weakening of the labor market and move policy toward a more neutral setting."

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