Below zero: Fed governor wouldn’t be surprised at negative job growth number

Fortune

by Christopher Rugaber, The Associated Press

February 23, 2026

AI-Generated Deep Dive Summary

Federal Reserve Governor Christopher Waller expressed uncertainty about the future trajectory of interest rates as he highlighted concerns over January’s strong job growth numbers, which added 130,000 jobs. Waller suggested that these gains might be a one-time occurrence and emphasized the need for further data to assess whether the labor market is improving. He indicated that if February’s job report reflects similar positive trends, the Fed may choose not to cut rates at its March meeting, potentially avoiding an action that has drawn criticism from President Donald Trump. However, Waller also acknowledged the possibility of revising downward last year’s reported job growth figures, which could result in negative numbers, a unique phenomenon in his career. Waller’s cautious stance contrasts with his January dissent against maintaining rates following three rate cuts. He noted that the Fed’s current rate of 3.6% might remain unchanged if February’s data confirms January’s positive trends. This decision would align with Waller’s view that the labor market, despite signs of economic growth, has shown minimal job creation in recent years. He posited that either a sustained recovery or a downward revision of job numbers could significantly impact the Fed’s policy direction. The significance of Waller’s comments lies in their potential to influence the Fed’s approach to rate adjustments, which directly affect borrowing costs for mortgages, auto loans, and business loans. His uncertainty reflects broader economic complexities, including the limited impact of Supreme Court decisions on tariffs and inflation, as well as the White House’s efforts to reimpose trade barriers. Waller also pondered the disconnect between a growing economy and lackluster job growth, suggesting that higher productivity driven by pandemic-induced efficiency could resolve this paradox. For business readers, Waller’s insights highlight the delicate balance the Fed faces in navigating economic indicators. His acknowledgment of the possibility of negative job growth figures underscores the potential risks to labor market stability and inflation control. As the Fed weighs these factors, Waller’s evolving stance signals a shift in the central bank’s approach, emphasizing data-dependent decisions rather than a predetermined path. This dynamic will be crucial for businesses and investors seeking to gauge future economic conditions and policy responses.

Verticals

businessfinance

Originally published on Fortune on 2/23/2026