Federal Reserve Weighs Cautious Interest Rate Cut Approach

Federal Reserve Governor Christopher Waller has proposed a cautious approach to interest rate cuts, emphasizing the need for gradual adjustments. He supports a potential 25 basis point reduction at the upcoming meeting, citing concerns about potential labor market rebounds or GDP weakening. The Fed intends to proceed with incremental steps of a quarter basis point, avoiding aggressive moves that could significantly impact the economy. Waller also notes private credit’s relatively low leverage and equity cushion, suggesting minimal risk to the stock market despite potential losses.