Statement by Governor Christopher J. Waller

Good morning, and thank you for the invitation to join you today.1 It is a pleasure to be with you for the Southwestern Graduate School of Banking's 161st Assembly for Bank Directors. Before we get started on the fireside chat, since the Federal Open Market Committee (FOMC) concluded its January meeting earlier this week, I think it would be helpful to summarize my views on the recent policy decision. I will then offer some remarks on the economy and also share my perspective on the outlook for monetary policy. As we enter 2026, the economy has continued to grow, and I see inflation moving closer to our goal. But beneath the surface, the labor market is fragile. I will provide some perspective on why I think that fragility poses the greater risk and what that means for the path of policy. FED’S BOWMAN: RATE HOLD WAS A CLOSE CALL Fed Governor Michelle Bowman said holding rates steady was not an easy decision and reflected a need for more data. She said policy remains moderately restrictive, but after 75 basis points of cuts last year, the Fed can afford to wait.…

Trump: Warsh will cut rates without White House pressure. *TRUMP: WARSH DIDN'T COMMIT TO CUTTING INTEREST RATES ... TRUMP: INAPPROPRIATE TO ASK WARSH ABOUT RATE CUTS TRUMP: IF TILLIS DOESN'T APPROVE, WE'LL WAIT UNTIL SOMEONE DOES TRUMP ON DOJ POWELL PROBE: RENOVATIONS INCOMPETENCE OR THEFT

Good morning. It is my pleasure to join you here in Rogers for the 32nd annual Arkansas Business Forecast Luncheon. For their kind invitation, I would like to thank University of Arkansas Chancellor Charles Robinson, Walton College of Business Dean Brent Williams, and the host of this event and Director of the Center for Business and Economic Research, Mervin Jebaraj. This is my fourth visit to Arkansas in the past year and a half, and I always learn a great deal about this dynamic state and economic conditions when I’m here. I look forward to taking questions from my St. Louis Fed colleague Matuschka Lindo Briggs in a few minutes. But first, I will offer some remarks on the economic outlook and monetary policy. Note these are my personal views and are not necessarily shared by my FOMC colleagues.1 I will begin with a summary of my remarks and then elaborate. First, the U.S. economy has been resilient, with considerable momentum coming into 2026. I expect the economy will continue to grow at or above trend this year. Of course, nothing is certain, but I see tailwinds supporting economic Fed's Musalem: Further interest rate cuts are not advisable. Policy is now neutral and the economy does not need stimulus. MUSALEM: NOT ALL OF CURRENT INFLATION IS FROM TARIFFS ... MUSALEM: RISK OF A SIGNIFICANT JOB MARKET DOWNTURN HAS FALLEN ...