Fed Speech · Waller

What the statement says

Hawkish shift: Waller explicitly supports removing 'easing bias' language and states rate hikes cannot be ruled out going forward

• Explicitly supports removing 'easing bias' language to signal rate cuts are 'no more likely [...] than a rate increase' — quote: 'I would support removing the "easing bias" language in our policy statement to make it clear that a rate cut is no more likely in the future than a rate increase.'
• States for the first time that rate hikes 'cannot be ruled out' if inflation fails to abate and inflation expectations 'show signs of becoming unanchored' — quote: 'I can no longer rule out rate hikes further down the road if inflation does not abate soon, and that is especially true if measures of inflation expectations [...] show signs of becoming unanchored.'
• Defines current stance as holding rates steady 'in the near term', with next move 'depend[ing] on the data' — quote: 'I do not expect to support a change to the policy rate in the near term. The next move, whether it is a hike or cut, will depend on the data.'
• Cites April core PCE inflation at ~3.3% (highest in 2.5 years) and overall PCE inflation at ~3.8% (highest in 3 years), both 'well above the FOMC's target of 2 percent' — quote: 'I estimate that personal consumption expenditures (PCE) inflation [...] rose around 3.8 percent over the previous 12 months [...] April core PCE inflation was up about 3.3 percent year over year, which is the most in two and a half years.'
• Identifies duration of Middle East conflict as key determinant of inflation path and reiterates view that 'markets are underpricing the risk of prolonged high energy prices' — quote: 'I said in a speech on April 17 that I thought markets were underpricing the risk of prolonged high energy prices, and I still think they are.'

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