Fed could cut interest rates 3 or 4 times this year: Official

Fed could cut interest rates 3 or 4 times this year: Official

WASHINGTON
Fed could cut interest rates 3 or 4 times this year: Official

FILE - Federal Reserve Board of Governors member Christopher Waller poses for a photo on May 23, 2022, in Washington.(AP photo)

The U.S. Federal Reserve could cut rates three or four times this year if inflation data cooperates, with a first cut possible before July, a senior bank official has said.

Headline consumer inflation rose for a third straight month in December as energy prices jumped, according to data published this week, but a widely watched measure eased slightly, raising hopes that underlying inflation may be moderating.

"The inflation that we got yesterday was very good," Fed governor Christopher Waller told CNBC, noting that underlying price pressures excluding volatile food and energy costs had been close to target on a monthly basis.

The U.S. central bank has been paring back interest rates in recent months, cutting by a full percentage point since September to bolster the labor market.

But in recent months, headline inflation has ticked higher, raising concerns that the Fed may have to pause further cuts throughout much of 2025.

At the most recent rate decision in December, Fed policymakers voted to cut rates by a quarter percentage-point to between 4.25 and 4.5, and penciled in just two rate cuts this year.

Waller, who is a permanent voting member of the Fed's rate-setting committee told CNBC that he could support lowering rates as many as four times this year, depending on the data.

Asked about the timing of cuts, Waller said if the data came in as he expected, it was "reasonable" to think rate cuts could come in the first half of the year.

He also refused to rule out supporting a cut as soon as the Fed's March rate decision, if the data supported it.

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