Federal Reserve Governor Christopher Waller said Friday he may dissent from the Federal Open Market Committee if policymakers opt to keep interest rates unchanged at the end of this month, reaffirming his call for a quarter-point cut in light of what he described as an “on the edge” labor market.
“It’s important not to dissent regularly,” Waller said in a Bloomberg Television interview. “But officials should take the step if you make it very clear you think at this moment in time this is an important thing to do.”
He added: “I dissented on the balance sheet slowdown earlier this year because I felt like that was not needed, and that’s kind of the situation we’re in now.”
The remarks follow a speech Thursday evening in which Waller publicly urged the Fed to lower its benchmark rate by 25 basis points at the July 30 meeting, citing subdued inflation readings and signs that the private sector is no longer generating robust job growth.
“The private sector is not doing as well as everybody thinks it is,” he said Friday. “Most of the employment growth we saw last month was in the public sector, and that means the private sector is not doing particularly well.”
The June employment report, released earlier this month, showed private-sector payrolls rising by just 74,000. Waller warned that these trends suggest the broader labor market may be softening, even as the headline unemployment rate ticked lower.
Asked whether he was concerned about the possibility of dissent from both himself and fellow Governor Michelle Bowman, Waller said disagreement within the Fed is not a liability but a healthy development.
“One of the things that has always bothered me since I took this job is the criticism that we are nothing but ‘groupthink,’” he said. “All the meetings are the same, nobody dissents, nobody does anything. I think this is healthy. I think this is a turning point in the way we want to think about policy. Some people don’t want to cut, some do want to cut. Coming out and making the case—either side—that’s good, healthy debate.”
Waller’s reference to “groupthink” echoed criticism from Fox Business’s Larry Kudlow and Breitbart Business Digest.
In a “Riff” on his Fox Business show (and in a column for the New York Sun) Kudlow said:
And Mr. Trump has homed in on that problem by saying that the Fed board is complicit with the mistakes of Mr. Powell.
Groupthink is a bureaucratic disease.
All these Fed announcements have 12 to nothing votes.
So where are the Trump appointees? Where is the new vice chairwoman for supervision, Michelle Bowman? Where is the former Notre Dame economics professor, Christopher Waller?
Where is some diversity of thought and why aren’t these board members questioning Mr. Powell’s slippery and uninformed anecdotes of his new tariff war on inflation?
In June, Breitbart Business Digest explained:
That makes the July meeting more than just a policy test. It’s a leadership test.
If Bowman and Waller follow through with dissents, it won’t simply mark a break from Powell. It will serve as a preview of who is willing to challenge the “staff view” that has so often driven Powell’s decisions—even when it clashed with real-world conditions. The next Fed chair will need to be someone who can stand up to the models, question the assumptions, and prioritize results over reputation.
The coming weeks may reveal which Fed members are ready to lead—and which are still waiting for permission.
Waller also dismissed concerns that the Trump administration’s recent tariff increases pose a sustained inflation threat. “The price hit from tariffs is likely to be temporary,” he said, adding that he sees “no sign that inflation expectations are on the rise,” a condition he views as giving the Fed room to proceed with rate cuts.
That puts Waller at odds with several of his colleagues who have said they would prefer to wait before easing, citing fears that tariffs could reignite inflationary pressures. Waller’s position aligns more closely with the Trump administration’s argument that current inflation is modest and largely unaffected by trade policy.
Asked whether he has discussed the possibility of succeeding Fed Chair Jerome Powell—whose term expires next May—with President Trump, Waller said there have been no conversations.
“If he says, ‘Chris, I want you to do the job,’ I’ll say ‘yes.’ But he’s not talking to me,” Waller said. “It’s a hypothetical that isn’t relevant.”
He emphasized that whoever is chosen to lead the central bank must have the confidence of markets. “You’re going to have to have somebody that has credibility with the markets,” Waller said. Without that, he warned, “you’re going to see inflation expectations spike. You will not get lower interest rates. You will get higher interest rates.”
“This is well-known,” he added. “We’ve seen this everywhere around the world when this happens. And I know Scott Bessent knows this. So, this is not something that is lost on anybody,” referring to Trump’s Treasury Secretary.
Waller’s comments helped push the dollar lower and nudged Treasury yields down as investors reassessed the likelihood of a rate cut this month. Fed futures markets continue to price in long odds of action in July, but expectations for a cut by September have risen.
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