Federal Reserve Governor Christopher Waller said the US central bank could lower interest rates again in the first half of 2025 if inflation data continues to be favorable.

With "inflation back to trend," Federal Reserve Governor Christopher Waller said Thursday he sees the possibility of three or four interest-rate reductions in the first half of 2025, provided the "data cooperates.

By Howard Schneider, Ann Saphir WASHINGTON (Reuters) -Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday in comments that pushed against recent market moves that anticipate a shallower Fed rate path.

Fears of elevated interest rates dampened the mood on Wall Street at the start of this year–but cooling core inflation and dovish comments by Federal Reserve governor Christopher Waller have given investors reason to feel a bit more cheerful this week.

At its December meeting, the FOMC lowered the federal funds rate to a range of 4.25% to 4.5%. Committee members also adjusted their median projection rate for the end of 2025 to 3.9%, up from a projected 3.4% in September.

The US Federal Reserve could cut rates three or four times this year if inflation data cooperates, with a first cut possible before July, a senior bank official said Thursday.

A top policymaker at the US Federal Reserve says that he still supports reducing interest rates this year, despite elevated inflation and the prospect of widespread tariffs.

Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday in comments that pushed against recent market moves that anticipate a shallower Fed rate path.