‘What’s the rush?’ Fed’s Waller says interest-rate cuts can wait.

Waller and other Fed officials have made a concerted effort in the past few weeks to brush back Wall Street’s previous forecasts for rate cuts as early as March.

Waller had been one of the more hawkish Fed officials in 2022 and 2023 in urging higher rates to squash inflation, but he began to soften his tone toward the end of last year as inflation waned.

Yet like other senior Fed officials, Waller said he wants to see more proof that inflation is slowing toward the central bank’s 2% target before he’ll support a reduction in interest rates.

The most recent inflation reports in January haven’t bolstered the case for rate cuts anytime soon: Both the consumer and producer indexes came in hotter than expected.

“Last week’s report on consumer prices in January was a reminder that ongoing progress on inflation is not assured,” Waller said.

“While I believe inflation is likely on track to reach 2% in a sustainable manner, I am going to need to see more data to sort out whether January’s CPI inflation was more noise than signal,” he said.

“This means waiting longer before I have enough confidence that beginning to cut rates will keep us on a path to 2% inflation,” he added.

Waller also doesn’t think the current level of interest rates — the highest in 23 years — is going to do serious damage to the U.S. economy.

“There are no indications of an imminent recession,” he said.

Wall Street appears to have gotten the Fed’s unified message: Traders are now betting that the first reduction in rates likely won’t take place until late spring or early summer. Previously, they were predicting a rate cut as soon as March.