Fed's Waller Sees March Rate Cut as 'Coin Flip' After Strong Jobs Report

Central bank governor says solid hiring in January could mean holding rates steady, but warns of uncertainty ahead.

Feb. 23, 2026 at 3:13pm

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Federal Reserve governor Christopher Waller said Monday that strong job gains in January could mean the central bank can skip a rate cut at its next meeting in March, though he cautioned that the economic outlook remains uncertain. Waller said the January jobs report, which showed employers added more than 130,000 positions, could indicate the labor market is improving, but he wants to see similar gains in February before concluding the economy is on solid footing.

Why it matters

The Fed's decision on interest rates has major implications for consumers and businesses, as lower rates can spur more borrowing and spending. Waller's comments suggest the central bank may be less inclined to cut rates further, which could disappoint President Trump, who has repeatedly criticized the Fed's policies.

The details

Waller said the solid January jobs report could mean 'it may be appropriate' to keep the Fed's short-term rate 'at current levels and watch for continued progress on inflation and strength in the labor market.' However, he added that if the January gains are revised downward or disappear in February, 'a cut should be made at the March meeting.' Waller also addressed the puzzle of an economy growing but with little job growth, suggesting the pandemic may have boosted productivity and allowed companies to produce more with fewer workers.

  • The Fed's next policy meeting is scheduled for March 2026.
  • The January 2026 jobs report showed employers added 130,000 positions.

The players

Christopher Waller

A Federal Reserve governor who is weighing the central bank's next move on interest rates.

Jerome Powell

The chair of the Federal Reserve, whom President Trump has criticized for the central bank's policies.

Donald Trump

The President of the United States, who has repeatedly attacked the Federal Reserve and called for lower interest rates.

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What they’re saying

“If February's jobs report is similar to last month's, 'indicating that downside risks to the labor market have diminished, it may be appropriate' to keep the Fed's short-term rate 'at current levels and watch for continued progress on inflation and strength in the labor market,”

— Christopher Waller, Federal Reserve Governor (bigrapidsnews.com)

“But if the good labor market news of January is revised away or evaporates in February,' he continued, 'a cut should be made at the March meeting.”

— Christopher Waller, Federal Reserve Governor (bigrapidsnews.com)

“As things stand today, I rate these two possible outcomes as close to a coin flip,”

— Christopher Waller, Federal Reserve Governor (bigrapidsnews.com)

What’s next

The Federal Reserve will hold its next policy meeting in March 2026, where it will decide whether to cut interest rates or keep them steady.

The takeaway

The Fed's decision on interest rates remains highly uncertain, as the central bank weighs the strength of the job market against broader economic conditions. Waller's comments suggest the Fed is closely monitoring the data and could go either way on rates at its next meeting.