Fed chair contender Christopher Waller says weak jobs data is strengthening the case for more rate cuts: ‘AI is stalling hiring’

What was on the record: a conversation between CNBC’s Steve Liesman and Fed governor Christopher Waller, a contender to replace Jerome Powell as chairman of the Federal Reserve, alongside frontrunners Kevin Warsh and Kevin Hassett. (In a spot poll, 81% of people in the room supported Waller taking the role, but just 36% predicted he would get the job.)

The conversation came at a time of weak job data and growing speculation about rate cuts, along with data showing a K-shaped economy in which wealthy Americans feel flush while their poorer brethren struggle with higher prices and slower wage growth. (The Fed cut rates for a third straight meeting earlier this month to support a softening labor market.)

Some of Waller’s comments that stood out for me:

On future rate cuts: “We’re still about 50 to 100 basis points above neutral,” said Waller, who argued for a rate closer to 3%. “We’re close to zero job growth. That’s not a healthy job market. AI is stalling hiring; there’s not going to be any reacceleration of inflation.” That said, “because inflation is still up, we can take time to steadily bring the rate down towards neutral.”

On central bank independence: “If there’s something pressing, I know in the past, Fed chairs have talked to the president. COVID is an example where you wanted a coordinated response. The Fed chair and the secretary of Treasury have breakfast every two weeks; that’s a typical channel of communication. I spent 20 years of my life working on central bank independence. The other side is accountability: We want central bank independence, but we still want to be accountable to the American public.”

On the growth outlook: Waller estimates 1.6% growth for 2025, largely due to a negative first quarter. He predicts a stronger picture for 2026, where “there will be some stimulus effects, productivity effects, a waning of tariff effects [which he thinks will settle at a 10-11% effective rate]. All of that is pro-growth, pro-U.S., inflation easing.”

On stablecoins: “If you want competition in the payment space, go to stablecoins. These are very fast and efficient ways to move money across the globe. I want an even playing field… We have to get off this crypto-is-an-evil-thing mentality; you have to understand all these technologies … This is going to strengthen the U.S. dollar.”

Contact CEO Daily via Diane Brady at [email protected]

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The markets

S&P 500 futures are up 0.41% this morning. The last session closed down 1.16%. STOXX Europe 600 was up 0.29% in early trading. The U.K.’s FTSE 100 was up 0.18% in early trading. Japan’s Nikkei 225 was down 1.03%. China’s CSI 300 was down 0.59%. The South Korea KOSPI was down 1.53%. India’s NIFTY 50 was flat. Bitcoin was steady at $87K.

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CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.