Federal Reserve officials were talkative this week, with one Fed governor showing the strongest support on record for a July interest rate cut, while others signaled a more cautious approach to monetary policy.

Fed Governor Christopher Waller, who had previously hinted he might support a July rate cut, went all in during a speech Thursday at a Money Marketeers of New York University forum, opening with the unambiguous statement: “My purpose this evening is to explain why I believe that the Federal Open Market Committee (FOMC) should reduce our policy rate by 25 basis points at our next meeting.”

Waller proceeded to lay out his case, saying he believes tariffs will result in “one-off increases” to consumer prices and will not cause inflation to heat up “beyond a temporary surge.” He also said the unemployment rate of 4.1% is “near the committee’s longer-run estimate” and headline inflation is close to the Fed’s 2% target “if we put aside tariff effects that I believe will be temporary.”

The Fed generally cuts interest rates to stimulate the economy during periods of heightened unemployment or cooling inflation, but it is less likely to do so when the labor market is strong or inflation is hot.

While Waller advocated for incremental rate cuts, he said the benchmark federal funds rate should be around 3%, not its current range of 4.25% to 4.5%. Waller is widely believed to be a potential candidate to succeed Jerome Powell as Fed chair, and his recent comments are likely to sit well with President Donald Trump, who has pushed the Fed to lower interest rates for months.

Kugler strikes a hawkish tone

Fed Governor Adriana Kugler, who like Waller serves on the 12-member FOMC, gave a speech Wednesday at the Housing Partnership Network Symposium in Washington, D.C. Its main focus was the housing market, with Kugler observing the costs of buying and occupying a home are both “elevated from a historical perspective.”

But her thoughts turned to the U.S. economic outlook toward the end of her prepared remarks. She cited a “stable and resilient” labor market and said data she reviewed this week estimates that overall inflation, as measured by the personal consumption expenditures price index, rose 2.5% on a 12-month basis in June, which would be a stronger gain than May’s 2.3% rate.

“Given the stability in the employment side of our mandate, with the unemployment rate still at historically low levels, elevated short-run inflation expectations, and goods inflation rising due to the upward pressure from tariffs, I find it appropriate to hold our policy rate at the current level for some time,” Kugler said.

Williams and Logan urge patience

John Williams, an FOMC member who serves as president and CEO of the Federal Reserve Bank of New York, said the current Fed rate stance remains “entirely appropriate.”

“Although we are only seeing relatively modest effects of tariffs in the hard aggregate data so far, I expect those effects to increase in coming months,” Williams said Wednesday during a New York Association for Business Economics event, according to Bloomberg.

Williams added that if the Trump administration hadn’t begun implementing its sweeping global tariff policies in April, inflation would likely be trending closer to the Fed’s 2% target.

Meanwhile, Lorie Logan, an alternate FOMC member who heads the Federal Reserve Bank of Dallas, told the World Affairs Council of San Antonio on Tuesday that while economic uncertainty persists, she sees a potential scenario in which “monetary policy needs to hold tight for a while longer to bring inflation sustainably back to target.”

“My base case is that we’ll need to keep interest rates modestly restrictive for some time to complete the work of returning inflation sustainably to the 2% target,” Logan said. “But it’s also possible that some combination of softer inflation and a weakening labor market will call for lower rates fairly soon.”

Goolsbee talks tariffs

Austan Goolsbee, an FOMC voting member and president of the Federal Reserve Bank of Chicago, used an unusual analogy during a Friday morning NPR interview to characterize the difficulty of setting monetary policy when tariff policies are constantly shifting. He said it’s like lying in bed when a dying smoke alarm battery periodically beeps — why bother trying to go back to sleep when it’s just going to beep again in a few minutes?

“If we’re going to revisit it every 30 days and announce new [tariffs] — 50% on copper, 50% on Brazil, go back and add more to Canada — it adds question marks,” Goolsbee said. He added that heading into the fall, the “most important task that the central bank has is to try to get the through line of what’s happening in the economy.”

NPR host Steve Inskeep also asked Goolsbee about the political pressure that has been exerted on the Federal Reserve by the Oval Office, with President Trump and White House budget director Russell Vought publicly pressuring Powell and the Fed to cut rates.

“It pains me to see public discussion that maybe there shouldn’t be central bank independence and that we should politically determine the interest rates in the short run,” Goolsbee responded. “That’s a mess. Just look around the world at countries where that is true. It’s not a pretty picture.”