Fed's Waller: Job market soft but not falling off cliff

Investing.com -- Federal Reserve Governor Christopher Waller described the current job market as "very soft" on Wednesday, stating that current payrolls growth is "not good."

Waller noted that the Federal Reserve’s rate cuts have helped the job market, though he emphasized that the central bank "doesn’t need dramatic action" and can proceed with cuts "at a moderate pace."

According to Waller, the Fed is currently 50 to 100 basis points above the neutral rate.

"The job market says Fed should continue to cut rates," Waller said, while reassuring that "we are not seeing job market go off a cliff."

On inflation, Waller stated it remains above target but should decline over the next few months. He expressed confidence that inflation expectations are anchored and dismissed concerns about potential re-acceleration in price pressures.

"I think that inflation is going to come down," Waller said.

Looking ahead, Waller suggested 2026 "could turn out to be a better year for economy" and expressed hope that this improvement would benefit the job market.

When asked about other factors affecting employment, Waller said it was "hard to say tariffs caused job market weakness" and acknowledged uncertainty about artificial intelligence’s future impact on employment, stating "don’t know yet what A.I. will do to job market."

Waller also noted it was "not wrong for there to be interactions between Fed and Administration."

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