Federal Reserve Governor Christopher Waller warned today that the Fed may need to raise interest rates in the near term if upcoming inflation data remains stubbornly elevated. Speaking at the New York Association for Business Economics, Waller declared that monetary policy is at a crucial "crossroads," emphasizing that the Fed cannot afford to be lackadaisical about price pressures.
Key Takeaways from Waller's Speech
- Near-Term Hikes Possible: Waller explicitly stated, “If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term.”
- "Sternly Staring" Won't Work: Dismissing the idea that anchored expectations alone can melt inflation away, he noted that "sternly staring at inflation until it melts before our withering gaze is not an option."
- Targeting Sticky Core Inflation: He flagged that core PCE inflation climbed from 3.0% in December to 3.4% in May. Crucially, he noted this core spike predated the recent U.S.-Iran oil shocks.
- Avoiding Past Mistakes: Waller stated he is determined not to repeat the Fed’s 2021 error of waiting too long to act on rising prices, though he cautioned against "fighting the last war" by over-tightening prematurely.
- High Bar for Progress: While a lower core inflation print this week would be welcome, Waller clarified he will need to see several months of lower readings to feel confident that inflation is durably heading back to the 2% goal.
Immediate Impact on Your Asset Watchlist
🪙 Bitcoin (BTC/USD)
- Trend Impact: Waller’s hawkish stance adds immediate fundamental headwind. A rising threat of interest rate hikes reduces liquidity and strengthens the U.S. Dollar index, punishing non-yielding risk assets like Bitcoin.
- Level to Watch: Spot BTC is reacting defensively, sliding closer to your primary structural support floor at $58,260.
📊 Strive, Inc. (ASST)
- Trend Impact: Tightly bound to the crypto ecosystem, ASST faces compounding pressure from both the tech sector selloff and Waller's higher-for-longer rate rhetoric.
- Level to Watch: Selling pressure remains persistent, keeping the stock trading tightly against its intraday lows and moving closer toward your $10.32 trailing stop-loss trigger.
Tomorrow morning's June Consumer Price Index (CPI) report is now the definitive catalyst for the next leg of this trend. Let me know if you would like to review the consensus forecasts for tomorrow's CPI data, or if you want to adjust your stop-loss alerts to protect capital before the data drop.
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