Will Governor Waller push December Fed rate cuts again?
2025-11-04 • Carter Bray
TL;DR:
Fed Governor Christopher Waller is pushing for another interest rate cut in December 2025, citing easing inflation and labor market softening. Companies hunting for funding should be ready—lower rates mean cheaper debt, better valuation, and a more friendly borrowing environment.
What Waller’s December Rate Cut Proposal Means for Businesses
Here’s the thing—Governor Waller recently suggested the Fed should slash interest rates again this December. He points to cooling inflation and signs that the labor market’s weakening. That’s a pretty big deal for companies looking to borrow or raise capital soon. Cheaper borrowing costs could make expansion plans much more doable.
Why Lower Interest Rates Matter for Business Funding
Cheaper Debt Frees Up Capacity
- When rates drop, borrowing costs fall. Loans and credit lines get easier on your wallet.
- Investors often get excited about cheaper capital since it usually lifts valuation—especially for growth-focused businesses.
- Companies with variable-rate debt might refinance or tweak their loans to snag better terms.
Easier Capital Raising
- Equity investors love rate cuts because they tend to boost momentum for startups and growth firms.
- Borrowing through venture debt, bank loans, or bonds becomes more appealing.
- Private equity and debt vehicles often deploy capital faster when leverage costs dip.
Market Sentiment Gets a Lift
- Rate cuts signal regulators think inflation is under control—which builds confidence.
- That confidence often leads to more hiring, investments, and willingness to take risks.
- Consumers also tend to spend more when borrowing is cheaper, which can boost company revenues. One caveat: this effect isn’t always immediate—sometimes it takes months to ripple through.
Real-World Winners When Rates Drop
| Company Type | How They Benefit |
|---|---|
| Startups & Growth Firms | Cheaper venture debt; can stretch fundraising; valuations improve. |
| Small & Medium Businesses | Lower variable loan payments; easier equipment and inventory financing. |
| Capital-Intensive Firms | Construction, manufacturing, infrastructure—they borrow big sums with less cost. |
| Real Estate & REITs | Mortgage rates fall; more projects get funded and financed. Financial Content |
| Technology & R&D | More affordable R&D funding; discounted cash flow valuations rise. |
Risks and What Companies Should Keep in Mind
- Cuts depend heavily on upcoming inflation, employment, and spending data. If inflation flares up again, the Fed might hit pause.
- Even with cheaper rates, banks could keep credit tight—so don’t expect an automatic green light everywhere.
- Not all your debt will benefit immediately — fixed-rate or already-committed loans won’t change.
- And remember, cutting rates doesn’t always spark instant effects; markets and supply chains tend to take their time adjusting.
Smart Moves for Companies Looking to Raise Capital Now
- Lock in deals early – Signing term sheets or credit lines ahead of a cut could secure you better rates.
- Review your capital mix – How much debt versus equity? Fixed or floating? Think about your risk tolerance.
- Anticipate valuation changes – Growth multiples often stretch when rates slip. Know your numbers.
- Watch economic data closely – Inflation, jobs, consumer spending are your signals for Fed moves.
- Chat openly with lenders and investors – Transparency about your plans builds trust and may smooth funding.
Concrete Examples
“Inflation is coming back to 2 %, biggest concern now is labor market,” Waller said on Fox Business. Investing.com That kind of clarity helps firms plan debt issuance and funding rounds.
Imagine a small software startup needing $2 million. If rates drop as expected, terms could improve by 0.5-1.0% annually. That’s a meaningful saving compared to waiting it out.
Meanwhile, a regional manufacturer could refinance equipment loans to save thousands monthly—funds they might redirect toward growth or hiring.
FAQ
Q: When exactly is this December rate cut possible?
A: At the Federal Open Market Committee meeting in December 2025, provided inflation and labor data continue trending favorably. Waller said that’s his leaning right now. Investing.com
Q: What inflation measures is Waller watching?
A: He emphasizes core inflation (excluding food and energy) and the personal consumption expenditures (PCE) index. Investing.com
Q: Should I wait for the rate cut before seeking funding?
A: Not necessarily. If your funding needs are immediate, it’s smart to engage lenders now while planning to take advantage when rates drop. Flexibility helps.
Q: How much cheaper could borrowing get?
A: It depends on loan type, credit risk, fixed vs floating rate. But savings of a quarter to half a percentage point are possible. Especially for variable-rate debt.
Q: Does a rate cut guarantee better market conditions?
A: No. Other factors—credit tightness, sector risks, competition, global uncertainty—still matter. But rate cuts tilt the odds in your favor.
If your company’s actively seeking funding, now’s the moment to sharpen your approach. Dive into your current debt profile, forecast your capital needs, and start conversations with lenders and investors. That way, if Waller’s prediction pans out, you’re ready to move fast. I’ve found that modeling potential impacts on costs or valuations can really clarify your options—happy to help with that anytime.