Waller proposed two tariff scenarios, suggesting that interest rates may still be cut earlier even amidst high inflation.

According to Wu, Wall Street Journal reporter Nick Timiraos reported that Federal Reserve Board of Governors member Chris Waller expressed a more dovish stance compared to other officials. He proposed two policy response paths under different tariff scenarios: if maintaining an average “high tariff” scenario of 25%, core PCE inflation could rise to 4% to 5%. If tariffs cause a significant economic slowdown and threaten a recession, he tends to favor an earlier rate cut even if inflation is above 2%. In a “low tariff” scenario with only 10% tariffs, inflation peaks at about an annualized 3%, with weaker shocks and slower transmission. If core inflation continues to decline, the Federal Reserve will consider cutting rates in the second half of the year.