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Federal Reserve governors Christopher Waller (left) and Michelle Bowman, Chair Jerome Powell, and then–Vice Chair Lael Brainard pose at the Fed’s headquarters in Washington, D.C., on May 23, 2022. / Source: AFP–Yonhap

Christopher Waller, a Federal Reserve governor considered a leading candidate to succeed Jerome Powell as Fed chair, said on Wednesday that the U.S. central bank may begin cutting interest rates this month and deliver several reductions over the next few months.

In an interview with CNBC, Waller warned that once the labor market begins to weaken, it can deteriorate rapidly. “Therefore, I think we need to start cutting rates at the next meeting,” he said, referring to the upcoming Federal Open Market Committee (FOMC) meeting on September 16–17.

Waller was one of two dissenters, along with Vice Chair Michelle Bowman, who voted in July for a rate cut rather than holding rates steady—a rare double dissent not seen in 32 years.

He noted that the current federal funds rate of 4.25–4.50 percent is about 1.0–1.5 percentage points above the neutral rate, the level consistent with stable inflation and maximum employment. That gap, he argued, justifies several rate cuts in the coming months.

“There could be multiple cuts over the next three to six months,” Waller said. “Whether decisions are made at every meeting will depend on the data.” While he sees at least one percentage point of easing as necessary, he stressed that it need not come from consecutive moves.

The Fed has three remaining policy meetings this year—September, October, and December.

Waller acknowledged that President Donald Trump’s tariffs act as a tax on consumers and could slow growth, but he said he does not foresee a recession. Both Waller and Bowman were appointed to the Fed during Trump’s first term, and Waller is now seen as a strong contender for Fed chair alongside figures such as Kevin Hassett, the former White House economic adviser, and former Fed governor Kevin Warsh.