The Federal Reserve will likely be able to lower interest rates this year, and recent data supports this outlook, Fed Governor Christopher Waller said. In a speech Monday morning in South Korea, Waller argued that inflation from the the Trump administration’s higher taxes on imported goods wouldn’t be persistent.

A short-lived bump in tariff-driven inflation could pass quickly enough to allow U.S. interest-rate cuts later this year, especially if tariffs themselves ease, Fed governor Christopher Waller said.

The prospect of a shift in US monetary policy when President Donald Trump replaces Jerome Powell at the end of his term as Federal Reserve chair in May 2026 has interest-rate traders looking for pay dirt.