WASHINGTON - United States Federal Reserve governor Christopher Waller said there is no rush to lower interest rates, emphasising that recent economic data warrants delaying or reducing the number of cuts seen in 2024.

Dr Waller called recent inflation figures “disappointing” and said he wants to see “at least a couple of months of better inflation data” before cutting.

He pointed to a strong economy and robust hiring as further reasons the Fed has room to wait to gain confidence that inflation is on a sustained path towards the 2 per cent target.

“In my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data,” Dr Waller said in prepared remarks on March 27 before the Economic Club of New York titled There’s Still No Rush.

Treasuries slipped in Asia trading as markets digested Dr Waller’s comments, with the policy-sensitive two-year yield climbing about four basis points. The short-dated bond benchmark has risen more than 35 basis points in 2024 as traders pushed back expectations for Fed cuts.

“I see economic output and the labour market showing continued strength, while progress in reducing inflation has slowed,” Dr Waller said. “Because of these signs, I see no rush in taking the step of beginning to ease monetary policy.”

Fed officials, who have kept interest rates at a more than two-decade high since July, are debating when and to what extent to lower borrowing costs in 2024.

Chair Jerome Powell has called the timing of such a decision “highly consequential” and emphasised the need for patience.

Dr Waller used the term “no rush” four times in his remarks, including in the title.

Investors are betting the first cut will come in June.

The Fed governor said recent economic data “tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory towards 2 per cent”.

Policymakers pencilled in three rate reductions for 2024 in their new forecasts released in March, according to the median estimate.

However, officials are split: Nine of 19 officials project two cuts or fewer.

Dr Raphael Bostic, a voting member of the Federal Open Market Committee (FOMC), said he anticipates lowering interest rates just once in 2024.

The economy continues to surprise officials with resilient growth, and Fed policymakers significantly boosted their estimate for gross domestic product in 2024 to 2.1 per cent, up from 1.4 per cent in December.

Hiring has remained strong, and key price gauges have exceeded economists’ expectations in recent months.

Dr Waller said it will be appropriate to reduce the policy rate some time in 2024 as the economy makes further progress on inflation.

“I continue to believe that further progress will make it appropriate for the FOMC to begin reducing the target range for the federal funds rate this year,” he said. “But until that progress materialises, I am not ready to take that step.”

“Fortunately, the strength of the US economy and resilience of the labour market mean the risk of waiting a little longer to ease policy is small and significantly lower than acting too soon.”

Dr Waller also made clear in the moderated discussion following his prepared remarks that there is very little chance the Fed would raise interest rates further.

“We never say never in central banking, but something would really have to dramatically change on the inflation front to think about that,” he said. “And we are not seeing that.”

The government will release data on the Fed’s preferred inflation metric on March 29. BLOOMBERG