“Policy risks have changed,” according to Christopher Waller.
And the monetary risk matrix has shifted to such an extent that the Federal Reserve governor now supports removing a controversial “easing bias” from the central bank’s policy statement “to make it clear that a rate cut is no more likely in the future than a rate increase.”
During a guest lecture at the Centre for Central Banking in Frankfurt, Germany, Waller noted that employment concerns drove his support for 75 basis points of rate cuts at the end of 2025, which he believes helped stabilize the labor market.
“Despite my lingering concerns going forward, I don’t see the prospect of a weakening labor market as the dominant force that should be guiding monetary policy in the mont...