Fed may cut rates sooner and faster than expected if disinflation holds up, Waller says

By Howard Schneider and Ann Saphir

January 16, 202511:47 AM ESTUpdated 7 days ago

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• Summary

• Waller's inflation outlook sees a faster return to 2% target
• He says a rate cut at Fed's March meeting cannot be ruled out
• Investors see two cuts as more likely in 2025 after his remarks

WASHINGTON, Jan 16 (Reuters) - Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday in comments that pushed against recent market moves that anticipate a shallower Fed rate path.

Inflation "is getting close to what our 2% inflation target would be," Waller said on CNBC, citing estimates indicating that one key measure of underlying inflation, the Personal Consumption Expenditures Price Index excluding food and energy costs, has been close to the Fed's target for six of the past eight months.