A couple of Fed heads hint at rate cuts

Investing.com -- While Federal Reserve Chairman Jerome Powell has insisted on a wait-and-see approach to additional interest rate cuts amid President Trump’s tariffs, a couple of other Fed heads were out on Thursday discussing a willingness for potential cuts.

Federal Reserve Bank of Cleveland President Beth Hammack said in a CNBC interview Thursday that a cut as soon as June could be possible.

“If we have clear and convincing data by June, then I think you’ll see the committee move if we know which way is the right way to move at that point in time,” Hammack said Thursday.

Elsewhere, Federal Reserve Governor Christopher Waller said in a Bloomberg interview that he would support rate cuts if tariffs start weighing on the job market.

“It wouldn’t surprise me that you might start seeing more layoffs, a tick up in the unemployment rate going forward if the big tariffs in particular come back on,” Waller said. “If I see a significant drop in the labor market, then the employment side of the mandate, I think, is important that we step in.”

The comments on rate cuts come somewhat counter to Powell’s remarks in Chicago last week that the Fed is “well positioned to wait for greater clarity before considering any adjustments to our policy stance.”  The Fed chairman has expressed concerns that the tariffs will create at least a temporary rise in inflation, which could become more persistent.

Powell’s comment angered Trump, who lashed out at him last Thursday, calling for his termination.  Trump has since walked back those comments after markets became uneasy with the rhetoric.  Earlier this week, Trump said he has “no intention” of firing Powell.

Today's comments from Hammack and Waller are lifting risk assets, like stocks.