Energy shocks + weak employment + stubborn inflation, the three-pronged dilemma facing the Federal Reserve: prioritize price stability or preserve jobs? Waller's underlying message is—don't rush to bet on easing.

Federal Reserve Board Member Waller stated that due to the energy shock caused by the Iran conflict, he is cautious about a short-term rate cut and warns that the conflict could keep inflation persistently high.
He proposed two scenarios: if the Strait of Hormuz reopens and energy and trade recover, inflation would fall back to 2%, and he would lean towards a rate cut later this year to support the labor market; if oil prices remain high and the labor market remains weak, policy space would be limited, requiring a trade-off between higher inflation and a weaker labor market, and if inflation risks exceed labor market risks, he would maintain the current rate.