Fed Governor Christopher Waller signaled he could keep interest rates steady at the March meeting if February's employment report shows continued labor market strength following January's unexpectedly robust job growth. Speaking at a National Association for Business Economics conference, Waller described January's 130,000 job gains as 'a surprise to the upside' and stated his policy view 'may tilt toward a pause' if February data mirrors that momentum. This shift comes after Waller dissented at the January Fed meeting, advocating for a quarter-percentage-point rate cut due to weak job growth and unemployment concerns.

He characterized his March decision as 'a coin flip' dependent entirely on the upcoming February jobs report, due March 6. The governor attributed current inflation pressures primarily to the Trump administration's import tariffs, expecting price pressures to ease as companies adjust to the duties. A recent Supreme Court ruling struck down most of these tariffs, though Waller deemed this unlikely to significantly impact monetary policy direction.

He noted underlying inflation, excluding tariff effects, remains near the Fed's 2% target, allowing him to focus on employment conditions. Waller acknowledged 2025's weak job creation while noting economic activity has exceeded expectations, projecting first-quarter GDP growth around 2% supported by solid consumer spending and recovering industrial activity.