Fed official gives clearance for rate cuts

An official from the Federal Reserve, right after its decision to hold rates in June, has given the heads up that interest rates will be cut in July.

Federal Reserve official Christopher Waller.

Waller said on Friday that he urges his colleagues at the Federal Reserve to cut rates, as he agrees with President Trump's crusade against them. Not only that, but he is also expecting a rate cut to happen as he believes that inflation is a temporary outcome of tariffs, and it will cool down over the course of the summer.

“We could do this as early as July,” Waller told CNBC in an interview. "I think we've got room to bring it down, and then we can kind of see what happens with inflation... we've been on pause for six months to wait and see, and so far, the data has been fine..."

The Fed earlier this week made its decision to hold rates eagerly, citing rising inflation like in the May CPI Report, and potential for more inflation over the summer.

The Federal Reserve Bank.

In fact, many officials in the Fed anticipate rate cuts to not happen until much later this year, with two as the ultimate goal. Some have even proposed keeping rates the same until as far as next year, with the majority of economic analysts disproving this.

However, perhaps not all the blame should be put on okay economic results lately. President Trump has recently engaged with the Fed as a belligerent against their wait-and-see policy, instead calling for a full-point rate cut. In a press briefing, Trump told Fed chair Jerome Powell, "I would like to get this guy to lower interest rates, because if he doesn’t, we have to pay."

Trump later added, "Maybe I should go to the Fed; I'd do a much better job... I think he [Jerome Powell] hates me."

And with Trump threatening to not re-nominate Powell come 2026, many Fed officials have caved in to the president's pressure and started to consider rate cuts for the first time in more than half a year.

The stock market on Friday reacted decently to this news, with the Dow up 0.2% as of 2:30 PM EST, and the Nasdaq and S&P 500 indexes stopping the bleeding from earlier this week.