Fed governor Chris Waller conditions his support for a March cut (or hold) on the February payroll data due for release on March 6. “As things stand today, I rate these two possible outcomes as close to a coin flip.” If the data validates the apparent upturn in the January payroll report, it would be appropriate to pause. “I can’t dismiss the possibility that the labor market data has pivoted to a more solid footing.” But he lays out reasons to suspect that the January report—the narrow breadth, the prospect for revisions, other surveys that weren’t favorable—was a head fake that would maintain a case for cutting in March. “There are enough asterisks around the January data that I will need to see the February report ... before forming any judgment on whether there has been a rebound.”

Waller doesn't engage with the concerns around inflation that have and—given firm PCE readings for Dec-Jan—may well continue to animate hawkish resistance from his colleagues. In his view, "underlying inflation is running close to 2%" once you net out tariff effects.