Federal Reserve Governor Christopher Waller, a candidate to take over from Jerome Powell as chair in 2026, voiced his support for starting a rate-cutting cycle in two weeks and said the central bank has the flexibility to adjust that pace.

Washington

Federal Reserve Governor Christopher Waller has publicly called for the central bank to begin cutting interest rates at its next meeting. Waller's position is based on the belief that recent tariff-driven inflation is likely temporary and that inflation expectations remain anchored, while the labor market shows signs of weakening. Other Federal Reserve officials, including St. Louis Fed President Alberto Mussallam and Atlanta Fed President Raphael Bostic, also discussed the outlook, with Mussallam noting increased downside risks to employment and Bostic maintaining a baseline of one rate cut this year, but open to more if the job market slows further.

Market sentiment has shifted strongly in favor of a rate cut at the upcoming meeting, with futures pricing in a high probability. The discussion also touched on ongoing legal proceedings involving Fed Governor Lisa Cook, with no comments from officials and a decision from the court still pending.

Fed Governor Waller: Fed should start cutting at September meeting

A lot of Fed speak, excuse me, to get to as well this morning in the mix. Fed Governor Waller on CNBC this morning with our Steve Leesman, also heard from Presidents Bostick and Mussallam. Steve Leesman here with us now. Waller continuing his push for lower rates. What else did we pick up? Yeah, well, he was unambiguously calling for rate cuts in our exclusive interview, Sarah, as you know, and also adding that the Fed may have far to go to get to neutral. The two other Fed speakers, they were not quite as dovish, but they did express some flexibility in their outlooks. First, let me get to Waller, who said that his call for cuts is really based on the idea that tariffs pass through the system and don't create wider inflation. If you take 3%, you're about 125, 150 basis points above that. And if tariff inflation looks like it's going to be temporary, and it's a one-time level effect, which I think, inflation expectations are anchored. Then the labor market's really weakening. So our dual mandate says worry about employment and inflation. Look through the inflation. Worry about the employment. Start cutting. So, St. Louis Fed President Alberto Mussallam, who you know among the more hawkish members, expressed his concern about tariffs. But he added, and I quote here, recent data have further increased my perception of downside risk to the labor market. That's the flexibility I'm talking about. Then you had Rafael Bostic, as Sarah said, stuck to his baseline of one cut this year, but said a faster slowdown in the job market, hey, that could bring them to the table for September. Okay, we had weaker factory data, a weaker JOLTS report, then expected all of that along with the Fed speak, adding to the market's conviction with a 95% probability in futures market of a September cut. And now October at around 51%. It's about an even money bet that they cut again in October. More confidence in the September outlook. Both Waller and Bostic, as you know, were asked about the situation surrounding Fed Governor Lisa Cook. Both declined to comment, Sarah. So it sounds like for the markets, the question is not September. September looks like a lock for a cut. It's whether we'll get one at all the rest of the meetings this year? I think that's right, Sarah. Are we gaming out two more cuts this year, one more cut this year? But also I think the broader question, and I've been following this, in fact, I'm going to look it up right when I talk now, Sarah, is I look at the December 26 Fed funds contract, which I think is significant. It's just coming up for me. It's right around 3%. So the trade right now on the December, it's far out, there's a lot that's going to happen between now and then. But when I look for the market's view of what happens now and the end of next year, it's the Fed going to neutral. So some way, somehow, at some pace, which Waller told us will be dictated by the data, he said they could start, they could stop, you know, if the inflation comes in a little hotter. I think everybody's along that line. And of course, as you know, Sarah, the makeup of the Fed might go through a pretty significant change over the next several months. Yeah, I think we're looking for Myron's hearing tomorrow. Steve, your thoughts on Lisa Cook, her attorney, this additional granularity, the argument that some of these facial contradictions could have been addressed by the White House or the Senate at the time. Yeah, so they're making the arguments that we understand they've made, although they did add this notion that and I think that's what you're alluding to, Carl, this idea that there were issues that were apparent that could have been addressed, that were known by when she submitted her disclosure documents for the job of Fed governor. What's important about that is the attorney for the administration in the hearing last week said if this stuff was known, then it would not be cause for removal. So Abby Lowell, the attorney for Cook, jumped on that, said, hey, let's go back and look at all these documents. Let's interview the investigators and figure out what they knew back then. Of course, the administration, that's not what they want. They want some summary judgment. They want the judge to find that the president firing of Lisa Cook for cause was legal. And right now we're just in this limbo situation, Carl, where we're waiting for the judge to rule. The government has another document it's going to file on Thursday. So no ruling before tomorrow, but maybe not right after that either.

"With infinite sorrow, the Armani Group announces the passing of its creator, founder, and tireless driving force: Giorgio Armani," the fashion house said in a statement on Thursday.

Milan

'King' of Italian fashion Giorgio Armani dies at 91

A federal judge on Wednesday ruled that U.S. President Donald Trump's administration unlawfully terminated about $2.2 billion in grants awarded to Harvard University and can no longer cut off research funding to the prestigious Ivy League school.

Cambridge

Trump admin unlawfully cut Harvard's funding, U.S. judge rules

Russian President Vladimir Putin has delivered a statement after meeting leaders on the sidelines of the military event in Beijing. He spoke about Russian security interests, and the Ukraine war.

Moscow

Ukraine Invasion

Putin wraps China visit with gas deal, calls for Ukraine peace talks

Hope is fading of finding survivors in the rubble of homes devastated by a powerful earthquake in eastern Afghanistan over the weekend that killed more than 1,400 people, as emergency services struggle to reach remote villages.

Kunar

Hope fades for finding survivors after Afghan quake kills over 1400

Portuguese authorities say at least 15 people died after a streetcar derailed and crashed in the capital of Lisbon. CBS News senior foreign correspondent Imtiaz Tyab has the latest.

Lisbon

Iconic streetcar in Portugal's Lisbon derails, 15 killed

Democratic Rep. Ro Khanna, along with Republican Reps. Thomas Massie and Marjorie Taylor Greene, held a news conference on Wednesday with survivors of Jeffrey Epstein and Ghislaine Maxwell's sexual abuse. CBS News' Caitlin Huey-Burns has more details.

Epstein survivors add voices to calls for transparency

Israel's central intelligence agency, Shin Bet, said that it thwarted an assassination plot by Hamas against the country's right-wing minister of national security, Itamar Ben-Gvir, Reuters reports.

Tel Aviv-Yafo

Israel reportedly thwarted plot to assassinate right-wing minister

In California on Tuesday, a jury took less than an hour to clear Cardi B of assault allegations made in a $24 million civil lawsuit. A security guard claimed the rap star attacked her in 2018.

Los Angeles

Cardi B wins civil case against security guard

Secretary of State Marco Rubio said on Tuesday that the U.S. military struck a boat apparently carrying drugs from Venezuela. CBS News' Charlie D'Agata has the latest details.

Trump says U.S. struck drug-carrying boat from Venezuela

China's Xi Jinping welcomed Russian President Vladimir Putin and North Korea's Kim Jong Un, along with other world leaders, for a huge military parade showing off new technology.

Beijing

Vladimir Putin, Kim Jong Un attend China's massive military parade

A Republican-led U.S. House of Representatives committee said it released more than 33,000 pages of files on the disgraced financier and convicted sex offender Jeffrey Epstein, as party leadership looked to end a push by a bipartisan pair of lawmakers to force a vote on the matter.

U.S. House committee releases thousands of Epstein files

French Prime Minister Francois Bayrou last week called for parliament to hold an earlier-than-expected vote of confidence in him. Next week’s ballot could lead to the collapse of his centrist government and prompt a period of further instability in the European Union’s second biggest economy.

Paris

France’s PM faces crucial confidence vote amid political turmoil

Tens of thousands of reservists began to report for duty on Tuesday for a new Israeli offensive to seize Gaza City, which Prime Minister Benjamin Netanyahu wants to accelerate despite warnings from senior ranks.

Middle East Conflict

Israel calls up reservists as military chief clashes with ministers

The House Oversight Committee on Tuesday released over 33,000 pages of documents related to sex offender Jeffrey Epstein.

33,000 pages of Jeffrey Epstein documents released by House panel

Belgium joins the ranks of Australia, France, Canada and the UK, all who have pledged to recognize a Palestinian state at the UNGA next week in a bid to ramp up pressure on the Israeli government to end the war in Gaza.

Brussels

Belgium to recognize Palestine at the UN General Assembly

A powerful 6.0 magnitude earthquake in eastern Afghanistan killed at least 1,400 people, according to the Afghan Red Crescent Society. Thousands more were  injured.

At least 1,400 killed in powerful Afghanistan earthquake

The death toll from Afghanistan's worst earthquake in years jumped to over 1,100 with thousands more injured, as difficult terrain hindered rescue efforts in isolated villages of the country's mountainous eastern region.

Taliban appeals for aid after quake kills over 1100 in Afghanistan

The leaders of Russia, China and India showcased a renewed commitment to co-operation on the second day of the Shanghai Cooperation Organization summit. Analysts says the friendliness is designed to project an unified alternative to the West.

Tianjin

Russia, China, India tout renewed co-operation

A plane carrying European Commission President Ursula von der Leyen was disrupted by jamming that authorities suspect was the result of Russian interference in Bulgaria.

Plovdiv

Von der Leyen's plane affected by alleged Russian GPS jamming

The world's leading genocide scholars' association has passed a resolution saying that the legal criteria have been met to establish Israel is committing genocide in Gaza, its president said on Monday (September 1).

Jerusalem

Israel committing genocide in Gaza, scholars' association says

Chinese President Xi Jinping and Russian President Vladimir Putin outlined a new global security and economic order at a regional summit on Monday (September 1), as India and Russia continued to express strong ties between their nations.

China's Xi, Russia's Putin share vision for new global order

A devastating 6.0 magnitude earthquake struck eastern Afghanistan late Sunday, killing more than 800 people and injuring hundreds more, officials said. CBS News senior foreign correspondent Holly Williams reports.

Kabul

Powerful earthquake in Afghanistan kills hundreds, destroys villages

Iran-backed Houthis raided offices of the United Nations’ food, health and children's agencies in Yemen’s capital, detaining several UN employees, officials said. The rebels tightened security across Sanaa following the Israeli killing of their prime minister and several Cabinet members.

Sana'a

Houthis raid UN offices in Yemen, detain 11 employees

A large buildup of U.S. naval forces in and around the Southern Caribbean has officials in Caracas and experts in the United States asking: is the move aimed at combating drug cartels, as the Trump administration has suggested, or is it for something else entirely?

Caracas

U.S. builds up forces in Caribbean as officials, experts concerned

Officials from the Trump administration spent the weekend pushing back against a U.S. appeals court ruling that most tariffs against Canada were illegal. Economic adviser Peter Navarro called the decision politically motivated.

Global Tariffs

Trump officials push back after court rules tariffs illegal

Israel's security cabinet is considering a plan to seize Gaza City with attacks ramping up over the weekend. The Israeli military has now ended a temporary pause of military action around aid delivery locations ahead of an expected 'full-scale assault'.

Israel intensifying attacks ahead of planned seizure of Gaza City

Illinois Gov. JB Pritzker says he's making every effort to stop President Trump from using the military to "invade states." But the White House claims the National Guard is needed to stop violent crime in Chicago.

Chicago

Trump threatens to send military to Chicago over crime

A young boy who had wandered away from his parents ended up on a closed monorail at Hersheypark in Pennsylvania this weekend. A bystander helped rescue the boy as a gathering crowd cheered. It's not clear how he made his way onto the monorail.

Hershey

Boy rescued from monorail track at Pennsylvania amusement park

A flotilla of boats carrying humanitarian aid for Palestinians in Gaza, has set sail from Barcelona. On board are organisers from 44 countries, who say they're trying to break Israel's siege on the Strip.

Barcelona

Greta Thunberg onboard second aid flotilla heading for Gaza Strip

Indian Prime Minister Narendra Modi said New Delhi was committed to improving ties with China in a key meeting with President Xi Jinping, as the two leaders discussed the need to expand trade and investment ties against the backdrop of U.S. tariffs.

Breakdown