Fed’s Waller says rate cut in March is a ‘coin flip’ following a strong US jobs report

WASHINGTON (AP) — Federal Reserve governor Christopher Waller said Monday that solid job gains in January could mean the central bank can skip a rate cut at its next meeting in March, a decision that would likely spur further attacks by President Donald Trump.

At the same time, Waller said last month’s pickup in hiring, when employers added a more-than-expected 130,000 jobs, could have been a one-time gain. He said he would need to see a similarly positive report next month to conclude the job market, which he noted was very weak in 2025, is improving.

Waller’s hedging is a notable shift from January, when he was one of the two Fed governors to dissent against the central bank’s decision to hold its key rate steady after three rate cuts at the end of last year. The decision left the Fed’s short-term rate at about 3.6%.

If February’s jobs report is similar to last month’s, “indicating that downside risks to the labor market have diminished, it may be appropriate” to keep the Fed’s short-term rate “at current levels and watch for continued progress on inflation and strength in the labor market,” Waller said in remarks to a conference held by the National Association for Business Economists.

“But if the good labor market news of January is revised away or evaporates in February,” he continued, “a cut should be made at the March meeting.”

“As things stand today, I rate these two possible outcomes as close to a coin flip,” Waller added.

Trump attacked the Fed on Friday after the government reported that the economy grew more slowly in the final three months of last year than in the summer and fall. Growth slowed to an annual rate of 1.4%, down from 4.4% in the fall.

“LOWER INTEREST RATES,” Trump posted. “’Two Late’ Powell is the WORST!!” he added, misspelling his usual nickname for Chair Jerome Powell, who he has referred to previously as “Too Late.”