Waller's FOMC Debut: Is the Rate Cut Truly Delayed Until 2027?

Tonight Waller speaks, the most important central bank speech of the year
Four hard signals are already on the table ⬇️
- The FOMC tends to remove language hinting at rate cuts, the signal light turns from green to red
- Dot plot expected to raise inflation expectations, pushing the rate cut timeline to 2027
- Federal Funds futures: over 80% chance of rate hikes this year, not no cuts, but possibly more hikes
- Waller previously questioned the forward-looking nature of the dot plot, possibly to keep policy flexibility
His real dilemma: triple pressures squeezing at the same time
- Core inflation stubborn, still ugly after stripping out energy → Hawkish arguments are well-founded
- US-Iran agreement + falling oil prices → provides a stepping stone for dovish signals
- Trump continues to call for rate cuts → this must not be compromised, or the bond market will punish the Fed for losing independence through sell-offs
💡Tonight it’s unlikely to see truly dovish signals
Most likely outcome: structural hawkishness, leaving room for discretion in wording
Currently, bitcoin:native has fallen from the high of $66,966 to $65,740, half of the expected decline has already occurred, the market is pricing in a hawkish outlook as expected
☝️Tonight’s three focus points:
1. Whether the language truly removes hints of rate cuts
2. Whether the median of the dot plot is in 2026 or 2027
3. How to respond to Trump’s pressure for rate cuts, the most testing moment for independence
DYOR, not investment advice
#FOMC #Waller