Federal Reserve Board Governors Christopher Waller and Michelle Bowman, both appointed to the body by President Donald Trump, spoke out on Friday about their dissent to the Fed’s decision to keep interest rates steady, arguing that delaying rate cuts risks harming the U.S. economy.
In separate statements explaining their dissents, Waller and Bowman, both widely considered as potential successors to Fed Chair Jerome Powell when his term ends in May, advocated for “gradual cuts” to interest rates, saying that President Trump’s tariffs have had little impact on inflation so far, CNBC reported. Federal Reserve policymakers voted 9-2 on Wednesday to keep interest rates in the 4.25% to 4.50% range, as Trump has blasted Powell and pushed the board to cut rates drastically. The Fed’s decision marked the first time since 1993 that multiple governors dissented. Waller and Bowman are the only governors currently on the board whom Trump appointed.
“There is nothing wrong about having different views about how to interpret incoming data and using different economic arguments to predict how tariffs will impact the economy,” wrote Waller. “But, I believe that the wait and see approach is overly cautious, and, in my opinion, does not properly balance the risks to the outlook and could lead to policy falling behind the curve.”
Bowman, who serves as the Fed’s vice chair for bank supervision, added, “With tariff-related price increases likely representing a one-time effect, it is appropriate to look through temporarily elevated inflation readings. I see the risk that a delay in taking action could result in a deterioration in the labor market and a further slowing in economic growth.”
Waller said he supports cutting interest rates by as much as 1.5 percentage points, which would be much smaller than Trump’s push for a three percentage point cut. Waller and Bowman’s alignment with Trump’s policy preferences while dissenting from Powell has sparked speculation that they are positioning themselves for consideration for Fed Chair.
In a press conference on Wednesday, Powell acknowledged that inflation “has eased significantly from its highs in mid-2022,” but he added that it “remains somewhat elevated relative to our 2% longer-run goal.” The Fed Chair also pointed to continued unease over Trump’s tariffs, which he said “are pushing up prices in some categories of goods.”
In the two days following the Fed’s decision, Trump has taken to Truth Social to blast Powell multiple times. His most recent criticism of the Fed Chair came on Friday morning in two separate social media posts.
“Jerome ‘Too Late’ Powell, a stubborn MORON, must substantially lower interest rates, NOW,” Trump wrote. ‘IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”
In a follow-up post, the president added, “Too Little, Too Late. Jerome ‘Too Late’ Powell is a disaster. DROP THE RATE! The good news is that Tariffs are bringing Billions of Dollars into the USA!”
Trump also commented on Waller’s and Bowman’s dissents, saying that pushback “WILL ONLY GET STRONGER!”