"Assessing the Timing: Fed's Waller and Jefferson on Interest Rate Cuts and Recession Risk"

Federal Reserve Governor Christopher Waller stated that he needs more evidence of cooling inflation before supporting interest rate cuts, citing higher-than-expected inflation readings for January. He expects the Federal Open Market Committee to begin lowering rates at some point this year but sees predominantly upside risks to his expectation that inflation will fall to the Fed's 2% goal. Waller emphasized the need for at least another couple of months of inflation data before judging whether January's high reading was a temporary bump or a more significant issue, and noted that the decision to be patient on easing policy is simpler given the strong economic indicators. Markets had previously priced in a high probability of a rate cut in March, but this has been pushed back to the June meeting, with uncertainty surrounding the timing and pace of cuts.