Federal Reserve Governor Christopher Waller delivered a stark message to markets on April 17, 2026, at Auburn University: the next move on interest rates might not be a cut. Waller stated the Fed's next decision 'could be either a hike or a cut,' and advocated removing the easing bias language from policy statements-a move that puts rate increases back on the table.
Waller was among the more dovish voices on the Federal Open Market Committee during 2025 and early 2026, backing multiple 25 basis point cuts. As recently as March 20, 2026, he supported rate cuts later in the year if labor market weakness persisted. The shift appears driven by inflation pressures tied to geopolitical tensions, particularly rising energy prices linked to the US-Israeli conflict with Iran. Waller now advocates holding rates steady until the economic picture clears, but warns future hikes cannot be ruled out if inflation continues trending upward.
A quick resolution to the geopolitical conflict could still support rate cuts later in 2026, Waller noted. Cleveland Fed President Beth Hammack has signaled similar hawkish sentiment, suggesting the shift is not isolated. For crypto and risk assets, this is critical: interest rate expectations drive liquidity conditions. Bitcoin and broader markets have shown deep sensitivity to Fed policy, recalling the 2022 tightening cycle that devastated valuations. Waller, a pro-innovation voice on digital assets, can't ignore his primary mandate. If inflation forces tighter policy, his personal views on crypto become irrelevant.