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Summary of Waller's speech — October hawkish pause + hawkish inflation target + no lock-in but retaining the option for a December rate hike, basically in line with previous market expectations! The hawkish rate hike in October was previously expected by the market, and tonight's Waller speech basically met expectations. Overall, the speech was actually less hawkish than expected. 1. Regarding inflation, this was the most hawkish part of Waller's speech, emphasizing no soft inflation target, the Fed's inflation target after the peak is 2%, and the Fed does not accept higher inflation expectations. 2. With nominal and real yields rising, the market naturally sees financial tightening temporarily replacing the need for Fed rate hikes, which also becomes the reason for no rate hike in October. 3. "Watchful thinking, not watchful waiting" — this is Waller's original phrase, trying to use this concept to replace the October pause in rate hikes, aiming not to let the market expect the end of the rate hike cycle and to keep the December rate hike window open. 4. Waller emphasized concerns about AI capital expenditure; his judgment is that strong capital expenditure is no longer limited to a few sectors, which is positive for the US economy and economic growth. AI is a demand shock in the short term and may become a supply shock in the long term. Waller's view is that the AI boom may not help the Fed cut rates but rather increase the difficulty of controlling inflation. 5. Waller acknowledged that high interest rates are suppressing tech companies but have not interrupted current capital expenditure. He knows the cost of high rates, but currently the US economy and AI investment...