Fed’s Waller praises stunning US job market turnaround, rules out symbolic hikes

Fed Governor Christopher Waller offered an upbeat assessment of U.S. labor market conditions on July 13, describing the turnaround from 2025’s near-stagnant job growth as “stunning.” Waller stated that markets believe the Fed will bring inflation to its 2% target and that the institution’s credibility remains intact — while explicitly ruling out symbolic rate hikes. The remarks appear consistent with a hold at the July 28–29 FOMC meeting, where the Fed is widely expected to keep rates steady at 3.50%–3.75%. Prediction markets have responded sharply: the “no change in July” sub-market dropped from 80% YES to 60.5% YES over 24 hours, while the 25-basis-point hike sub-market surged from 20% to 36.5% YES — pricing that appears consistent with growing uncertainty over whether Waller’s rejection of symbolic hikes indicates patience or preparation.

Key Takeaways

• Pricing in the “no change” July market suggests participants view a hold as still the base case at 60.5%, though the 20-point drop in 24 hours indicates meaningful recalibration.
• The September hike market at 56% YES, up from 28% one week ago, appears consistent with Waller’s framing that inflation risks — not labor weakness — now dominate policy deliberations.
• The Pause–Pause–Pause market at 63.5% YES, down from 90% seven days ago, reflects receding confidence in an uninterrupted hold sequence through July.

What to Watch

The July 28–29 FOMC statement and Powell press conference represent the next high-impact catalyst, where any shift in language around “additional policy firming” could further compress the hold probability. Incoming CPI and PCE data before the meeting may indicate whether Waller’s inflation credibility framing holds or whether re-acceleration pushes the October hike market — currently 66% YES — still higher.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.