Fed Governor Christopher Waller offered an upbeat assessment of U.S. labor market conditions on July 13, describing the turnaround from 2025’s near-stagnant job growth as “stunning.” Waller stated that markets believe the Fed will bring inflation to its 2% target and that the institution’s credibility remains intact — while explicitly ruling out symbolic rate hikes. The remarks appear consistent with a hold at the July 28–29 FOMC meeting, where the Fed is widely expected to keep rates steady at 3.50%–3.75%. Prediction markets have responded sharply: the “no change in July” sub-market dropped from 80% YES to 60.5% YES over 24 hours, while the 25-basis-point hike sub-market surged from 20% to 36.5% YES — pricing that appears consistent with growing uncertainty over whether Waller’s rejection of symbolic hikes indicates patience or preparation.
Key Takeaways
Pricing in the “no change” July market suggests participants view a hold as still the base case at 60.5%, though the 20-point drop in 24 hours indicates meaningful recalibration.
The September hike market at 56% YES, up from 28% one week ago, appears consistent with Waller’s framing that inflation risks — not labor weakness — now dominate policy deliberations.
