Fed Governor Chris Waller on interest rate outlook: Caution is warranted

• Waller's view on inflation has shifted, with persistent high oil prices now seen as a greater concern for core inflation, unlike previous expectations of short-lived spikes.
• He highlights that near-zero labor force growth means zero net new jobs is the break-even for the unemployment rate, which he finds mathematically sound but emotionally challenging.
• He advocates for caution in monetary policy, stating that while structural factors might bring inflation down after tariffs wash through, the sustained oil price impact requires careful monitoring before any rate adjustments.

Fed Governor Christopher Waller discusses his evolving views on inflation, noting increased concern over persistent high oil prices potentially bleeding into core inflation. He emphasizes a cautious approach to monetary policy, waiting for further data on labor markets and the impact of tariffs before considering rate cuts or hikes.