<p>According to Wu, Wall Street Journal reporter Nick Timiraos reported that Federal Reserve Governor Chris Waller expressed a more dovish stance compared to other officials. He proposed two policy response paths under different tariff scenarios:</p><ul><li>If a "high tariff" scenario with an average of 25% is maintained, core PCE inflation may rise to 4% to 5%. If the tariffs trigger a significant economic slowdown that threatens a recession, he leans towards cutting interest rates even if inflation exceeds 2%.</li><li>In a "low tariff" scenario with only a 10% tariff, the peak inflation is about 3% annualized, with weaker impacts and slower transmission. If core inflation continues to decline, the Federal Reserve would consider cutting interest rates in the second half of the year.</li></ul>

According to Wu, Wall Street Journal reporter Nick Timiraos reported that Federal Reserve Governor Chris Waller has expressed a more dovish stance compared to other officials. He proposed two policy response paths under different tariff scenarios: if a "high tariff" scenario with an average tariff of 25% is maintained, core PCE inflation could rise to 4% to 5%. If the tariffs trigger a significant economic slowdown that threatens recession, he is inclined to lower interest rates even if inflation exceeds 2%. In the "low tariff" scenario, maintaining only a 10% tariff, the peak inflation is about 3% annualized, with weaker shocks and slower transmission. If core inflation continues to decline, the Federal Reserve will consider lowering interest rates in the second half of the year.

Waller presented two tariff scenarios, suggesting that rate cuts could still happen earlier even under high inflation conditions.