🏦 Fed Nominee Waller Signals Possible 0.5% Rate Cut: What It Means for Markets and Korea

At the end of August 2025, a major signal was sent from inside the U.S. Federal Reserve.

Christopher Waller, a current Fed Governor and the top nominee for next Fed Chair under President Donald Trump,
👉 reaffirmed his support for a rate cut in September — and even left the door open for a larger 0.5% cut if labor market data weakens further.

📌 Quick Summary

• Waller supports a 25 basis point (0.25%) rate cut in September.
• If the labor market deteriorates further, a 50 basis point (0.5%) cut is on the table.
• New labor statistics may show that job growth was overestimated in past months.
• Waller warns that the Fed should not wait too long to respond.

🧠 Why It Matters

Waller isn’t just another Fed Governor.

He’s currently
✅ Donald Trump’s leading pick for the next Fed Chair.

That means his comments are more than personal opinions — they reflect the likely direction of future Fed policy under a Trump administration.

📉 Is the Labor Market Already Weakening?

Waller questioned the accuracy of recent U.S. labor data,
saying upcoming revisions could show the economy created 60,000 fewer jobs per month than previously reported.

“The private sector may have actually been losing jobs on average over the past 3 months,”
he said, warning against relying solely on headline unemployment numbers.

He emphasized that
📌 a shrinking labor supply can mask falling demand,
and it’s demand weakness that monetary policy must address.

⏱️ Why Act Now?

“Waiting too long could mean we fall behind the curve,”
Waller said, explaining the importance of a proactive approach.

He also pointed out that current rates are still about 1.5 percentage points above neutral,
so further cuts could be necessary over the next 3–6 months.

🇰🇷 Why It Matters for Korean Investors

1. USD Weakness → KRW Strength

• Lower U.S. rates = weaker dollar
• Potential boost for exporters and Korean won

2. U.S. bond rally → Korean bond inflows

• As U.S. yields fall, global funds may seek higher yields in Korea
• Positive for Korean bond funds and debt markets

3. Pressure on Bank of Korea

• If the Fed cuts aggressively,
• The BOK may follow suit in late 2025 or early 2026

📝 Summary Table

📌 3 Things to Watch Now

✅ 1. Fed’s September FOMC decision
✅ 2. August U.S. employment report (due next week)
✅ 3. Any new signals from the Bank of Korea

🔗 Source
CNBC, Jeff Cox (August 29, 2025)
“Fed nominee Waller says 0.5-point cut possible if labor market keeps weakening”