It has been 100 days since Kevin Waller took the oath as Federal Reserve Chair. On the previous day, at the annual global central bank symposium in Jackson Hole, Wyoming, he delivered his inaugural address in that role. In his own words, "There is no better place to mark my 100th day in office." While observers quickly branded the speech as hawkish, Waller stated that on this milestone day, he wished to discuss his most significant thoughts—yet cautioned against interpreting them as forward guidance.

CNN noted that for over two decades, Fed chairs have typically signaled the path of interest rates in their Jackson Hole keynote addresses. Waller broke with that tradition, advancing a key reform he champions: reducing the Fed's communication with markets and the public regarding its future plans. He remarked that a quieter, more purposeful Fed is better equipped to achieve its goals.

During the press conference following the Fed's policy meeting on July 29, Waller mentioned his desire to "breathe the fresh air of Jackson Hole to clarify major issues." Interestingly, he opened his speech by sharing a hiking anecdote from Jackson Hole. He outlined two distinct hiking experiences: one was a strenuous "marathon-style march" with former Vice Chair Stan Cohen, which he summarized as "I survived." The other was a leisurely stroll with former Chair Ben Bernanke. The moral, he suggested, is to assess your physical condition before deciding which pace suits you. US media interpreted this wry opening as a metaphor for his approach to the future rate path: while price stability is the Fed's mandate, the timing and method of action should depend on the economy's current state.

Waller acknowledged that inflation remains too high and stressed the need to be confident that underlying price pressures are moving toward the 2% target quickly enough; otherwise, there is more work to do. Markets read this as a hawkish signal. Notably, however, he offered no specific timeline for rate hikes, arguing that hinting at or committing to a future rate path prematurely could create new forms of misguidance. He defended his abandonment of forward guidance, insisting that communication must serve the Fed's primary duty: setting sound monetary policy.

Waller recounted how forward guidance was introduced as a standard tool during the 2008 financial crisis, a policy he himself championed as a Fed governor at the time. It served to reassure markets by pre-committing to a rate trajectory. But with the economic environment now changed, he believes the tool should be restrained in normal times; otherwise, it risks "creating ambiguity in the name of clarity"—like two mirrors facing each other, reflecting images back and forth while ignoring the real world.

Returning to the real world, Waller emphasized that the Fed plays a vital role in the economy and markets, and policymakers must act prudently at all times. If the Fed misjudges inflation or economic conditions, the hardest hit would not be high-income financiers but ordinary citizens. He advocated relying on reality and making decisions based on the most accurate, non-isolated data possible, pledging to build more reliable models and robust rules to guide policy.

Naturally, Waller's remarks also touched on AI. He noted that expanding pools of capital are flowing into AI-related infrastructure, and "AI could become a new factor of production." The Fed is monitoring this closely and has established a working group to study AI's effects on asset prices, business confidence, household income, and consumption. He stressed, however, that this would not influence decisions in the current policy cycle. Markets have already sensed that AI is no longer just a tech-sector story, but may soon be woven into broader macroeconomic narratives.

Kevin Waller, aged 56, was sworn in as Fed Chair on May 22. Since taking office, he has pledged to "forge a new policy path" and has repeatedly declined to offer forward guidance on rates. Additionally, the Fed has set up five independent working groups to assess key policy areas, including monetary policy communication, balance sheet policy, economic data, productivity and employment, and the inflation framework.