Base case is a hawkish 25bps cut unless data surprises violently on either side. The rate path for 2025 depends on their estimate of neutral (more on this). I think they should pencil three cuts for next year, which should be consistent with cooling but steady job market and moderating inflation.
Comments
First, the gap in performance of the interest rate sensitive sectors such as manufacturing of business equipment vs the rest of the economy is an indicator of how restrictive policy is - aka, how far we are from neutral - for Waller.
I personally think neutral's closer to 3.5-3.75, but who really knows? But I do think the next 2-3 cuts are easy.
These two points highlight why Waller's dovish and also add to our framework for analyzing their reaction function in the future.