• If oil stays high for months on and at some point it leads into core inflation.
• A high and persistent oil shock would not have a transitory impact on inflation.
• Based on the jobs report was planning to dissent, but since then inflation has become more of a concern
• Zero job growth does not seem normal, but that is what the math may indicate will keep the unemployment rate stable
• Fed cannot look through a large and persistent will shock, at this point caution for the Fed is warranted.
• Wants to wait and see how this evolves before deciding on rate cuts for later this year.
• Fed is making progress on taming structural inflation, which may be close to 2% now but is held higher by tariffs.
• Do not think there is a need to consider rate hikes.
• Inflation expectations are not unanchored.Investors understand inflation will drop once tariffs rolloff.
• If the tariff effects don’t roll off in the 2nd half of the year it will be tricky.
• A shock of the right sort could push companies to start cutting labor. It could be the price of oil moving higher.
• Consumer outlook could also be damaged with gas prices rising.
• No reason to make bank reserves scarce just to reduce the balance sheet.

Fed Governor Christopher Waller, who had previously leaned toward lower rates, has shifted his stance amid renewed inflation concerns tied to the recent spike in oil prices.

Waller argues that rising energy costs pose a broader risk than tariff-driven price increases, as oil feeds into a wide range of goods and services across the economy. In contrast, he views tariffs as more likely to create one-time price adjustments—not sustained inflation.

He also noted that tariff-related price pressures have been less pronounced than expected so far. However, he cautioned that if those prices fail to ease by mid-year, it could become a more persistent inflation issue.

For now, inflation expectations remain anchored, with the baseline view still leaning toward moderation in price pressures—but Waller’s shift highlights growing sensitivity to energy-driven risks, and a more wait-and-see attitude.

Typically, Miran issues a statement on his dissenting bias on the Friday after the rate decision. Awaiting that response. .