Official indicates Fed could start cutting rates

WASHINGTON — A key Federal Reserve official raised the possibility Tuesday that the Fed could decide to cut its benchmark interest rate as early as spring if inflation keeps declining steadily.

Christopher Waller, a member of the Fed's Board of Governors, cautioned that inflation is still too high and that it's not yet certain if a recent slowdown in price increases can be sustained.

Still, in remarks at the American Enterprise Institute, a Washington, D.C.-based think tank, he sounded the most optimistic notes of any Fed official since the central bank launched its aggressive rate hikes in March 2022, and signaled the central bank is likely done raising rates.

Waller is regarded as a relatively "hawkish" official, meaning he typically favors higher rates to combat inflation rather than low rates to boost job growth. He is somewhat of a bellwether for the Fed's overall rate-setting committee.