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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 already expected by the market, and tonight's Waller speech basically met those expectations. Overall, the speech was actually less hawkish than anticipated. 1. Regarding inflation, this was the most hawkish part of Waller's speech, emphasizing no soft inflation target, the Fed's inflation target is capped at 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 justifies no rate hike in October. 3. "Watchful thinking, not watchful waiting" — this is Waller's original phrase, trying to use this concept to replace a rate hike pause in October, 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 spending is no longer limited to a few sectors, which is positive for the US economy and economic growth. AI is a short-term demand shock 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 spending. He understands the cost of high rates, but currently, the US economy and AI investment...