CNBC | Saturday, April 18, 2026 
Fed Governor Waller says Iran war and labor market risks are keeping central bank on hold

Federal Reserve Governor Christopher Waller on Friday said current economic conditions are complicating the approach to interest rates, with policymakers facing a potentially long-lasting inflation shock and a labor market with no job growth that nonetheless appears stable. Against that backdrop, Waller said the Fed could have to stay on hold for a prolonged period until the economic direction becomes clearer. “High inflation and a weak labor market would be very complicated for a policymaker,” the central banker said for a speech in Alabama. “If I face this situation, I’ll have to balance the risks to the two sides of the Fed’s dual mandate to determine the appropriate path of policy, and that may mean maintaining the policy rate at the current target range if the risks to inflation outweigh those to the labor market.” The speech comes with markets expecting the Fed to stay on hold this year amid the cloudy economic outlook. For Waller, the address marked a departure from his previous assessment of the labor market. In recent months he has expressed concern about the low hiring level, but said Friday that evidence is building that the break-even rate — where the pace of hiring sustains the unemployment rate — may be close to zero. Waller had been a supporter of cutting interest rates, but voted in March to hold the benchmark federal funds level in a range between 3.5%-3.75%. However, he said he still has concern about the labor market...Read more