Fed Waller: General tone is many companies are frozen by tariff uncertainty | Forexlive

Fed’s Waller on Bloomberg:

• The general tone is many companies are frozen by tariff uncertainty.
• Firms are trying to see how two navigators.
• It wouldn’t surprise me to see more layoffs, higher unemployment.
• Smaller tariffs will have minus pass-through.
• We need better control of budget deficit.
• No obvious reason why tariffs should be off table as part of fiscal debate.
• Not likely by July there will be clear tariff impacts yet.
• Easiest place to offset tariff costs is by cutting payrolls.
• The second half of the year will bring clarity on the impact of tariffs.
• Less level of unemployment but speed of change that focus
• It is possible that tariffs could push up unemployment quickly
• Struggle over last 18 months has been uneven inflation progress
• Still strongly believes tariffs will be one-time price level effect.
• Demand slow down from tariffs would offset some inflation impact.
• It’s going to take courage to stare down tariff price increases and see them as transitory.
• I am willing to look through tariff price increases.
• Rate cuts could come from rising unemployment
• Fed will look at data to determine policy moves.
• Data focus brings risk of being late on policy action.
• Tries to ignore political issues, keep focus on Fed’s mission.
• Pres. is free to say what he wants about the Fed.

Waller’s tone leans slightly dovish overall, given:

• Openness to rate cuts in response to rising unemployment, but not in a hurry

• Willingness to look through tariff-related price increases (I don’t know how can ignore inflation risks especially if there are supply shocks because of the “embargo” and how that will ripple through the economy.

• Focus on economic resilience over reacting to short-term price shocks.

However, he also maintains a cautious and data-driven stance, with concern about being too late on policy responses. The emphasis on watching unemployment and dismissing politically motivated pressure reinforces a balanced but inflation-tolerant posture—for now.