According to Fortune, at the Yale CEO Summit on Wednesday, Federal Reserve Governor Christopher Waller—a contender to replace Jerome Powell—made the case for more interest rate cuts, arguing the current policy is still 50 to 100 basis points above neutral. He pointed to “close to zero job growth,” stating that “AI is stalling hiring” and that there won’t be a reacceleration of inflation. Waller estimated 2025 growth at just 1.6% but was bullish on stablecoins as a fast, efficient payment technology that will strengthen the U.S. dollar. In a spot poll at the summit, 81% of attendees supported Waller for Fed chair, though only 36% predicted he’d actually get the job. The conversation followed a third straight Fed rate cut aimed at a softening labor market within a K-shaped economy.
Waller, AI, and the Jobs Puzzle
Here’s the thing: Waller’s comment about AI stalling hiring is a pretty blunt admission from inside the Fed. We’ve all heard the hype about AI displacing jobs, but for a sitting governor to cite it as a current, material factor justifying easier monetary policy? That’s a significant shift in narrative. It’s not just about cooling demand anymore; it’s about a structural change in the labor market. He’s basically saying the old models for predicting job growth might be broken. And if AI is already having this effect, what does that mean for the long-term “neutral” rate of interest? It probably needs to be lower than we thought.
The Politics of the Next Fed Chair
The summit’s poll is fascinating. Huge support in the room from CEOs, but low odds he gets the nod. Why the disconnect? Waller’s comments on independence give a clue. He spent 20 years working on it and emphasized accountability. But in a potential second Trump term, with frontrunners like Kevin Warsh and Kevin Hassett (both former Trump advisors) in the mix, Waller might be seen as too much of an institutionalist. His pragmatic view on stablecoins and tech is forward-thinking, but the top job often comes down to political alignment. The breakfasts with Treasury will be a lot more consequential next year.
Broader News Bites
Beyond the Fed, the other items paint a picture of a business world in flux. BP hiring its first female CEO in Big Oil is a historic move for a beleaguered company trying to stabilize. YouTube snagging the Oscars from ABC is a seismic shift in media—chasing those 2 billion global eyeballs is the whole game now. And Amazon‘s potential $10 billion OpenAI deal, paired with its AGI head leaving, screams internal uncertainty. Are they building or just buying? Looks like a bit of both, which is never a confident signal.
The Global Context
You can’t ignore the international tensions simmering beneath all this. The massive U.S. arms sale to Taiwan and Trump’s threats on Venezuelan oil are direct geopolitical risks that markets will eventually have to price in. And China’s record 4 million civil service exam takers? That’s a stunning statistic. When your most educated youth are desperately seeking government jobs in a stagnant economy, it’s a major red flag for future growth and innovation. It’s a stark contrast to the AI-driven efficiency Waller is describing in the U.S. So we’re looking at a world where technology is compressing labor demand in the West, while in China, the state is becoming the employer of last resort. Not exactly a synchronized global recovery.
