Fed Governor Waller Calls for More Easing as Inflation Persists  

Federal Reserve Governor Christopher Waller told the Society of Professional Economists in London Monday night that he backs another 25-basis-point cut at the December FOMC meeting, calling the move “additional insurance” against a slowing labor market. His speech, delivered barely a month after a 43-day U.S. government shutdown halted many official releases, leaned heavily on private-sector data while insisting policymakers are not “flying blind.” Yet the same afternoon, spot gold briefly pierced $4,082 an ounce—a fresh record—hinting that investors doubt the Fed’s rosy inflation narrative.

Waller painted a near-recessionary picture of employment. Private payroll processor ADP shows average monthly job creation of only 27,000 from May through August and a paltry 6,500 in September–October. Challenger, Gray & Christmas has counted roughly one million announced layoffs so far in 2025—65 percent more than last year—including 153,000 in September alone. Continuing claims for jobless benefits are now above 2023–2024 levels, evidence that displaced workers are struggling to find new slots. Waller argued that keeping policy too tight for too long could deepen the slide.

Even so, his confidence on prices borders on nonchalance. Twelve-month Consumer Price Index (CPI) inflation is running at 3.0 percent, while his preferred PCE gauge sits near 2.8 percent—still above target for a fifth straight year. He labeled tariff-driven price spikes “one-off” and claimed medium- and long-term expectations remain “well anchored.” Tell that to households confronting record-low housing affordability: mortgage rates above 6 percent mean the income needed to buy a median home has jumped 50 percent since 2020, far outpacing wage growth. Auto financing isn’t faring better; a five-year loan now costs 7.6 percent, and a new vehicle devours 37.4 weeks of median pay versus 32.8 pre-pandemic. For many families, whatever inflation the Fed sees as ‘transitory’ feels permanent.

Macro indicators aren’t comforting either. The Blue Chip consensus projects only “modest” real GDP growth in the back half of 2025, while the University of Michigan’s consumer-sentiment index has tumbled to near all-time lows—a pattern that has preceded every modern U.S. recession. Stock-market cheer, Waller conceded, is concentrated in artificial-intelligence darlings that employ less than 3 percent of the workforce, leaving Main Street largely untouched. Against this backdrop, the Fed governor’s eagerness to reopen the monetary spigot looks less like prudence and more like déjà vu for anyone who remembers the 1970s inflation spiral.

Gold’s explosive move above $4,000 may be the purest referendum on Waller’s gambit. While policymakers debate quarter-point tweaks, honest money is flashing bright-red warning lights about the purchasing power of the dollar.

With the December meeting looming, the central bank faces a stark choice: double down on rate cuts and hope inflation really is tamed, or heed the market’s signal that easy money still carries a steep, if delayed, price. Savers and retirees, already stretched by higher living costs, have little margin for another miscalculation.