Speaking in Mumbai, Waller argued that AI investment, including data centre construction, is supporting demand now while its productivity payoff remains years away, and that changes in the Fed’s overnight rate are not driving the 10-year yield much. His reading cuts against the market’s war-driven inflation explanation for the bond selloff, one day before the September CPI print that will test which account is right.
Waller says yield surge reflects growth, not inflation fears
Federal Reserve Governor Christopher Waller said on Tuesday that inflation expectations remain well anchored and that the climb in Treasury yields to 24-year highs reflects real growth and lost safe-haven demand, not an inflation premium.
Why it matters: If Waller is right that eroding safe-haven demand alone could be adding 50 to 70 basis points to yields, long rates stay high even if the Fed stops raising, which is the pricing question hanging over Wednesday's September CPI report.
Data as of Tuesday, October 13, 2026. Single wire report (Reuters) of Waller's remarks at a Bloomberg event in Mumbai, opened and read in full, hence grade C. The 50 to 70 basis point figure is academic research Waller cited, not a Fed estimate. Developing item, 2 to 3 sentences by design.
Sources
- US inflation expectations are well anchored, Fed's Waller says · Reuters, via 94.7 The Beast · 2026-10-13