Fed Divided on July Rate Cut as Markets Rally

Federal Reserve Governor Christopher Waller signaled strong support for a potential interest rate cut as early as July, pointing to recent cooling inflation and a resilient labor market, although he noted rising unemployment among graduates. Waller argued that inflation from new tariffs is likely to be temporary and should not delay rate reductions, advocating a cautious but proactive approach. His dovish remarks have boosted stocks and cryptocurrencies, even as the Federal Open Market Committee recently voted to hold rates steady for the fourth consecutive time. The Fed's 'dot plot' projections reveal a split among officials, with some favoring two or more cuts this year, while others prefer no change or just one reduction. Waller emphasized that decisions should be based on underlying inflation trends, rather than temporary shocks. Despite the market's positive reaction, the likelihood and timing of a July rate cut remain uncertain.