A top policymaker at the US Federal Reserve says that he still supports reducing interest rates this year, despite elevated inflation and the prospect of widespread tariffs.

Inflation should continue falling in 2025 and allow the U.S. Federal Reserve to further reduce interest rates, though at an uncertain pace, Federal Reserve Governor Christopher Waller said on Wednesday.

Federal Reserve Governor Christopher Waller expects that inflation will continue to make progress toward the central bank's 2% goal over the medium term and that further rate cuts will be appropriate,

Federal Reserve Governor Christopher Waller doubled down on more rate cuts and cooling inflation following higher price projections from the central bank and growing expectations among investors

At its December meeting, the FOMC lowered the federal funds rate to a range of 4.25% to 4.5%. Committee members also adjusted their median projection rate for the end of 2025 to 3.9%, up from a projected 3.4% in September.

Two top Federal Reserve officials on Thursday questioned the need for many more interest rate cuts. Fed Governor Michelle Bowman and Kansas City Fed President Jeff Schmid both said the 100 basis points in rate cuts since September has brought the Fed’s benchmark rate down to “neutral,” where it neither dampens or boosts demand.

With "inflation back to trend," Federal Reserve Governor Christopher Waller said Thursday he sees the possibility of three or four interest-rate reductions in the first half of 2025, provided the "data cooperates.