The Federal Reserve is considering a new chairperson who aligns with Trump-era policies, with the announcement expected in January. Among the candidates, Christopher Waller, currently one of the notable contenders, is gaining attention. His recent statements, which followed the Federal Reserve’s latest interest rate decision, have gained considerable importance as they could influence the cryptocurrency market, with Bitcoin 
$75,409 struggling to regain the $88,000 level.
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Waller, who continues to serve his term until 2030, was appointed by Trump in 2020 and is now one of the five leading candidates to replace Jerome Powell. Among the 19 members (including non-voting ones), seven prefer no rate cuts for the upcoming year. However, figures like Miran, Williams, and Waller argue that the delay in necessary rate cuts has adversely affected employment, advocating for quicker reductions.
Key highlights from Waller’s ongoing remarks reveal his concerns about the labor market’s fragility and inadequate wage growth. He argues that the Federal Reserve’s interest rate cuts have supported the job market, yet inflation remains above target levels, though it is expected to decrease shortly. The job market’s growth in the U.S. is near zero, but an increase in productivity might improve the situation by 2026.
Waller believes inflation hovers around a satisfactory level of 2% without any resurgence. As the labor market conditions suggest, the Fed should continue with interest rate reductions, adopting a moderate pace without resorting to drastic measures. Currently, the Fed’s rates exceed the neutral level by 50 to 100 basis points. Waller remains optimistic about inflation tapering off, although pinpointing customs duties as a reason for labor market weakness poses a challenge.
The Fed could consider lowering rates if inflation expectations soften. Given the prevailing outlook, there is no need to rush rate reductions. New asset purchases by the Fed are not viewed as stimulative, allowing for a steady decrease in interest rates without urgency. With inflation under control, the Fed plans to maintain this stability.
Waller dismisses tariffs as a persistent inflation source and does not foresee significant tariff increases. However, the implications of Supreme Court decisions on tariffs remain uncertain concerning Fed policy. He maintains that interest rate cuts are on the table, but the extent of Fed’s support is yet to be seen.
With the interest rate decision expected in 42 days, a 75.6% likelihood favors maintaining the current rates.
