Fed's Waller: cuts only after a clear demand shock

The Fed official specified that easing would only follow a 'demand shock'—a sharp and sustained drop in consumer spending and business investment. He explicitly excluded supply-driven moderation of inflation and said the current data still shows a strong labor market. Markets are pricing in a cut that the Fed is not yet ready to deliver. The gap between market pricing and Fed guidance is itself a source of tightening via higher real yields.