Fed Governor Waller Expresses Interest in Chair Role, Hints at July Rate Cut Citing Private Sector Weakness

Federal Reserve Governor Christopher Waller publicly expressed his interest in the position of Fed Chair while suggesting the possibility of a July rate cut, arguing that private-sector employment weakness justifies action this month.

In an interview on Friday, Waller cited concerns over private-sector hiring as the key driver behind his call for a rate cut this month. He noted that last month’s job growth was primarily driven by the public sector, indicating that private-sector conditions may not be as robust as widely believed. He even hinted that he might dissent if his colleagues choose not to cut rates at the July 29-30 meeting.

During the interview, Waller also made candid remarks about the possibility of succeeding current Chair Jerome Powell. When asked how he would respond if President Trump offered him the Fed Chair position, Waller replied: “If he said, 'Chris, we want you to do the job,' I would say yes."

Following his comments, a key dollar index fell 0.39% to hit a session low, while U.S. Treasury yields also edged lower. Market expectations currently lean toward a September rate cut, making Waller’s push for a July move notably more aggressive than consensus.

Private-Sector Weakness as Key Rationale for Cut

Waller’s argument for a rate cut centered entirely on structural labor market concerns. This assessment was based on the June nonfarm payrolls report released on July 3, which showed that while the overall unemployment rate dipped slightly, private-sector job growth slowed and wage increases moderated. Waller’s view is that, with limited inflation risks, the Fed should lower borrowing costs before labor market conditions deteriorate—a stance consistent with a speech he delivered in New York on Thursday.

Open Interest in Fed Chair Role

With Chair Powell’s term set to expire next May, Waller has been frequently mentioned as a potential successor. In the interview, he made clear that he would accept the nomination if offered.

However, Waller added that President Trump has not contacted him about the matter, calling it a “hypothetical irrelevancy” for now.

While expressing his personal willingness, Waller also emphasized that whoever the president chooses must maintain financial market trust—otherwise, inflation expectations and interest rates could rise.

Waller warned that if the next chair lacks credibility, “you’re going to see inflation expectations spike. You will not get lower interest rates. You will get higher interest rates.” He added that the consequences of such a scenario follow a “universal dynamic” observed worldwide.