Federal Reserve governor Christopher Waller made his strongest call yet for a rate cut in July as he again argued that any inflation from tariffs would be temporary, underscoring a new divide within the central bank.

Christopher Waller, a potential contender to be the next chair of the central bank, said the Federal Reserve should not wait for the labor market to weaken to reduce interest rates.

Chicago Federal Reserve Bank President Austan Goolsbee on Friday said the constant "drip drip" of new tariff announcements undercuts the idea that tariffs have only a one-time impact on prices, and without clarity on where they will end up the central bank will need more time to decide if rate cuts are appropriate.