Federal Reserve Governor Christopher Waller recently expressed his views on the potential for a rate cut at the upcoming March meeting, depending on the labor market data in February. In his speech at the National Association for Business Economics, Waller emphasized that one month of strong labor market data does not necessarily indicate a trend, but a year of weak job creation does.

Waller highlighted that 2025 saw the weakest job creation outside of a recession since 2002, and cautioned that spending increases may be driven by richer households, masking the weakness in lower to middle income groups. He noted that if January’s strong labor market data is revised away or evaporates in February, it would support his view from the January Fed meeting that a 25bp cut is appropriate and should be made at the March meeting. While this is not necessarily a dovish stance, Waller is open to considering a pause rather than an immediate rate hike.

Waller’s comments suggest that the Federal Reserve may take a more cautious approach to monetary policy in the near term, given the ongoing uncertainty and potential for a slowdown in economic growth. However, it is important to note that the Fed has not yet made any official decisions regarding interest rates, and will continue to monitor economic data and adjust its policies accordingly.