Federal Reserve Governor Christopher Waller just reminded markets that the interest rate conversation can go both directions. In remarks on July 13, Waller warned that persistently elevated core inflation readings could push the FOMC to tighten monetary policy, a scenario most investors had mentally filed under “not gonna happen.”
Bitcoin and equities dropped on the news.
What Waller actually said
The core message was straightforward: if inflation data keeps running hot, rate hikes are back on the table. Waller specifically flagged core PCE inflation at 3.3% year-over-year, a level he noted in an earlier May 22 speech as the highest reading in two and a half years.
Waller also expressed willingness to support a federal funds rate increase if inflation expectations appear “unanchored.”
