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Fed's Waller: Cuts could come sooner than later if disinflation meets expectations

BY Reuters | ECONOMIC | 01/16/25 10:33 AM EST

WASHINGTON (Reuters) - Inflation is likely to continue to ease and possibly allow the Federal Reserve to cut rates sooner and faster than expected, Fed governor Chris Waller said Thursday in comments that pushed against recent market moves that anticipated a shallower Fed rate path.

Inflation "is getting close to what our 2% inflation target would be," Waller said on CNBC. "If we continue getting numbers like this it is reasonable to think rate cuts could happen in the first half of the year...I am optimistic that this disinflationary trend will continue and we will get back closer to 2% a little quicker than maybe others are thinking."

(Reporting by Howard Schneider)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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