Christopher Waller was supposed to be one of the Fed’s doves. The kind of governor who spent early 2026 making the case for rate cuts, arguing the economy needed a lighter touch. That version of Waller apparently didn’t show up in Frankfurt.
Instead, the Federal Reserve governor took the stage on May 22 and delivered a speech that amounted to a monetary policy U-turn. His core message: the Fed’s “easing bias” language needs to go, and if inflation doesn’t start cooperating, rate hikes are firmly on the table. Bitcoin dropped to around $76,700 almost immediately. Futures markets recalibrated.
What Waller actually said
The speech, delivered in Frankfurt, Germany, centered on the Fed’s increasingly uncomfortable relationship with inflation. April’s Personal Consumption Expenditures index, the Fed’s preferred inflation gauge, climbed to 3.8%. That’s nearly double the central bank’s 2% target, and the pressures aren’t confined to one corner of the economy. They’re broad-based.
Waller pointed to two key accelerants. Energy price shocks tied to the ongoing Iran conflict have rippled through supply chains and consumer costs. Lingering tariff effects continue to keep import prices elevated.
