Waller Calls March Rate Cut a Coin Flip as Fed Awaits February Jobs Data

Overview

• Fed Governor Christopher Waller said the March decision hinges on fresh labor data, describing the choice as "close to a coin flip."
• He indicated he would back a 25-basis-point cut next month only if January’s strength is revised away or February’s report weakens; similar momentum would favor holding rates.
• January payrolls rose about 130,000 and unemployment fell to 4.3%, figures Waller cautioned may be a one-off concentrated in health care and construction.
• Prediction markets now see the Fed keeping rates unchanged in March, with odds leaning toward the first reduction in June.
• The policy rate stands near 3.50%–3.75% after three 2025 cuts, Waller and Stephen Miran dissented from January’s hold, and Waller said tariff rulings likely have limited inflation impact as CPI eased to roughly 2.4% in January.