Federal Reserve Governors Christopher Waller and Michelle Bowman said Friday that holding interest rates steady is a mistake, warning that continued inaction threatens the U.S. labor market.
Both governors, appointed by President Donald Trump, voted against this week’s 9–2 decision to keep the key rate at 4.25% to 4.50%, marking the first dissenting votes from sitting governors since 1993.
Waller and Bowman called for a quarter-point rate cut, citing minimal inflationary effects from Trump’s new tariffs. “The wait and see approach is overly cautious,” Waller said, warning that policy may fall “behind the curve.”
Bowman, who serves as the Fed’s vice chair for bank supervision, said delaying cuts could slow economic growth and hurt employment. She emphasized that tariff-related price hikes are likely temporary and should not dictate broader policy.
Trump has continued pressuring the Fed to slash rates, calling Chair Jerome Powell a “moron” on Friday and demanding the board intervene if he refuses to act.
