Wake up. The shift already happened — and most people are still asleep.
If the Fed hands control to Christopher Waller, this isn’t a policy change. It’s a system stress test. The kind that doesn’t explode overnight… it cracks slowly, then all at once.
The roadmap sounds perfect:
AI boosts productivity → productivity kills inflation → inflation gives cover to drain trillions from the balance sheet → rate cuts ride in as the “soft landing.”
Clean. Elegant. Dangerous.
Because pulling trillions in liquidity doesn’t happen quietly. It tightens financial conditions whether markets agree or not. Real rates rise. Treasuries buckle. Yields spike. Risk spreads blow out. Confidence starts to fracture.
Then comes the trap.
Rate cuts weaken the dollar — not slowly, but structurally. So now bonds are selling off and the dollar is falling. That’s downward resonance: stocks, bonds, and the dollar collapsing together. The nightmare scenario. The one portfolios are not designed to survive.
This is why Powell moved slowly. Not because he lacked courage — but because he understood how fragile the system already is. One wrong push and feedback loops take over. Liquidity disappears. Volatility feeds on itself. Markets stop believing the plan.
Waller’s strategy bets everything on one assumption:
That AI productivity arrives fast, smooth, and perfectly timed.
If that slips — even slightly — the entire roadmap collapses.
And when policymakers are forced to panic, pivot, and reverse…
The real damage won’t be the crash.
It will be the loss of credibility.
And once that’s gone — markets don’t forgive.
