Federal Reserve Board Governor Wall: If non-farm payroll data weakens, will vote to support interest rate cuts in March.

During his term as a member of the Federal Reserve Board with permanent voting rights on the FOMC monetary policy, Federal Reserve Governor Christopher Waller said that his decision on whether to support a rate cut at the Fed's next monetary policy meeting will depend on the upcoming nonfarm payroll data. Waller stated that if the February labor market statistics show a decrease in downside risks like in January, then it might be appropriate to maintain interest rates at the FOMC meeting scheduled for March 17th to 18th. "But if the positive growth momentum seen in January's labor market data is essentially wiped out, then this would support my position at the last FOMC meeting where I voted in favor of a 25 basis point rate cut, and it would be appropriate to continue this pace of rate cuts at the March meeting," he said in remarks prepared for an event hosted by the National Association for Business Economics in Washington on Monday. Waller voted against maintaining the Fed's benchmark policy rate in January, stating that given signs of weakness in the labor market, he was more inclined to support a 25 basis point rate cut. Subsequently, the January nonfarm payroll report released by the U.S. government exceeded economists' expectations, showing robust job growth and a decrease in the unemployment rate. Assuming underlying inflation continues to signal that the 2% target is close, Waller said the key to determining appropriate policy will depend on the labor market outlook. "Given the current state of affairs, I think the two possible outcomes are roughly evenly balanced," Waller said. Waller welcomed the positive data but expressed concern that the noise in the data could outweigh the signal, especially as revised data in the report showed that net job growth for the entire year in 2025 was almost zero, indicating a weak and fragile nonfarm labor market through 2025. The Bureau of Labor Statistics will release the February nonfarm payroll report on March 6. Waller reiterated that he would continue to exclude the impact of President Donald Trump's administration's aggressive trade policies when assessing inflation. "I expect that what I call core inflation - inflation excluding the impact of tariffs - is close to the FOMC's 2% target," he said. He also noted that the Supreme Court ruling last Friday reversing most of Trump's emergency tariff measures was unlikely to have a significant impact on his views on how the Fed should set its monetary policy path. While the January U.S. nonfarm payroll data was much stronger than market expectations, leading to a reduction in market expectations of rate cuts by the Fed in 2026 from 3 to 2, David Einhorn, founder of Greenlight Capital, a Wall Street hedge fund investment giant, predicted that the Fed would cut its benchmark rate "far more than twice" this year, and said the market severely underestimates future easing of monetary policy. Einhorn, one of Wall Street's top hedge fund managers, believes that betting on more rate cuts than currently expected by the market is "one of the best trading logics right now." Speaking to the media, Einhorn said, "The Fed is definitely going to cut rates, and much more than the market has priced in." When asked how many rate cuts he expects from the Fed, Einhorn simply responded, "A lot, as you might anticipate." Steven Major, a veteran of the financial industry on Wall Street and global macro strategist at Tradition Dubai, recently said in an interview that a Fed led by Kevin Warsh could cut interest rates much more than market expectations. Goldman Sachs, a Wall Street financial giant, recently released a research report stating that it is a mistake to judge the policy direction of Warsh, based on his hawkish remarks during his tenure as a Fed member. The Goldman Sachs strategy team stated in the report, "In our view, at least being willing to cut rates is a precondition for him getting the job."