Chris Waller Says Support For March Fed Rate Cut Will Depend On Jobs Report

Federal Reserve Governor Chris Waller has said his support for a March Fed rate cut will largely depend on the February jobs report. This came as he acknowledged the January jobs report, which came in better than estimates, although he noted that it isn’t conclusive evidence that the labor market is improving. This is significant considering how the Fed’s rate decisions continue to impact the crypto market.

Waller Outlines Conditions For Support Of March Fed Rate Cut

In a speech delivered in Washington, Waller indicated that he will support a rate cut if the incoming jobs report dents the idea of a turnaround in the labor market and points to continued weakness like last year. On the other hand, he stated that his outlook may be a bit more positive, and he could support a pause if the data support an improvement in the labor market along with progress towards their 2% inflation goal.

The February jobs report drops on March 6, before the FOMC meeting, which takes place on March 17 and 18. The CPI report, which is scheduled for release on March 11, will also precede the meeting. Waller, who notably dissented in support of a Fed rate cut at the January FOMC meeting, also acknowledged the January jobs report, which came in above estimates. Nonfarm payrolls rose to 130,000, above expectations of 65,000.

The Fed Governor stated that the data as a whole was positive, but not conclusive evidence that the labor market is on a more solid footing. “One month of good news does not constitute a trend, but a year does, and the year of 2025 was an extraordinarily weak one for job creation—the weakest outside of a recession since 2002,” he said.

Waller also stated that if there is a downward revision for the January figures, or if the February figures contradict the January figures, then it would support his position at the last FOMC meeting that a 25-basis-point (bps) Fed rate cut was appropriate. He added that he would support a cut if this happens.

PPI Inflation Report Is The Next Focus

The January PPI Inflation report, which is scheduled for release on February 27, is the next major macro data point market participants will be watching to gauge the current state of inflation in the country. The PCE inflation data came in hot last week, rising to 2.9%, above expectations of 2.8%.

Furthermore, Core PCE rose to 3%, above expectations of 2.9%. Following the data release, the odds of a March Fed rate cut dropped to as low as 4%. CME FedWatch data shows a 96% chance that the Fed will hold rates steady at the March FOMC meeting.

Meanwhile, the FOMC minutes showed that a rate hike may be on the cards. Several participants indicated that they may support a hike if inflation remains above target levels and fails to progress towards their 2% target.

FOMC voting members, such as Fed Presidents Lorie Logan and Beth Hammack, recently raised concerns about inflation. They stated that they won’t support further Fed rate cuts until they see inflation progress towards their target.