• The U.S. is “within striking distance” of the Federal Reserve’s 2% inflation goal, but the central bank should not rush to cut its benchmark interest rate until it is clear lower inflation will be sustained, Fed Governor Christopher Waller said on Tuesday.
  • And regardless of when rate cuts begin, Waller said the central bank should proceed “methodically and carefully,” not make the sort of large, fast reductions used when the Fed is trying to bail out the economy from a shock or a pending downturn.
  • Waller’s remarks served as a counter to market expectations that the Fed will start cutting rates at its March meeting and lop perhaps 1.5 percentage points from the benchmark policy rate by the end of the year. After he spoke traders pared bets that the Fed would in March reduce a policy rate that has been left in the current range of 5.25% to 5.5% since July.