Waller Takes Office and Raises Rates: Lower Inflation, Yet Policy Script Reverses

BlockBeats News, September 17 — According to publicly available market data, two months before the 2024 presidential election, the Federal Reserve led by Jerome Powell significantly cut interest rates by 50 basis points despite core CPI remaining as high as 3.3%. Two years later, with only two months left before the 2026 midterm elections, the Federal Reserve under the leadership of Christopher Waller raised interest rates by 25 basis points even as core CPI had dropped to 2.4%. During these critical pre-election periods, the policy direction of the Fed under Powell and Waller has undergone a dramatic reversal, making this contrast particularly intriguing. Former President Donald Trump had consistently advocated for lower interest rates and chose Waller as the Fed Chair, with the market initially viewing this appointment as a key move to push for rate cuts. However, Waller's first interest rate decision after taking office was a rate hike. Waller cited reasons such as the strengthening U.S. economy, inflation still being relatively high, and geopolitical shifts. Among these factors, U.S. actions against Iran and the resulting energy and geopolitical risks have also become considerations for the Fed in reassessing the economic outlook.