Fed Speech · Waller

What the statement says

Neutral: Waller's speech focuses on modernizing Fed operational structure, with no change to monetary policy stance

• Clearly distinguishes 'inherently local' functions (e.g., FOMC participation, regional economic research, supervision of state member banks, local financial inclusion work) from 'system-wide' functions (e.g., HR, IT, finance, procurement, payments, fiscal agency) that do not require geographic dispersion.
• Proposes two modernization models: (1) standardization with centralized System leadership—retaining the 12 Reserve Banks’ physical footprint but placing major support functions under single System-level leaders; and (2) deeper consolidation—co-locating non-local functions in low-cost cities or outsourcing where cost savings justify it.
• Identifies the consensus-based decisionmaking model across 12 Reserve Banks as a key operational bottleneck—stating that 'the decisionmaking model... that serves us well in the Board Room when developing monetary policy is not ideal when it comes to running our operations.'
• Cites specific inefficiency drivers: 'We are significantly "off-market" on IT costs, largely because of localized development of applications and procurement of software, and because of the complexity of our offerings across the Banks'; cites AI and cybersecurity as requiring greater agility.
• Emphasizes statutory continuity: both models preserve the Federal Reserve Act’s mandated 12-district structure, local boards of directors, and Board of Governors oversight—only redefining internal operational governance, not legal authority.

AI-generated summary of the official text. The official statement is authoritative. Not investment advice.