Welcome to this week’s edition of Week at a Glance—your one-stop shop for everything you need to know in macro. Let’s get straight into it, because yesterday brought one of the more important Fed signals we’ve seen in a while.

Chris Waller, who is increasingly positioning himself as the intellectual anchor of the FOMC, delivered a noteworthy dovish pivot in his public remarks. He explicitly tied the Fed’s future reaction function to the evolving tariff landscape, stating that if new tariffs lead to downside growth risks, he would favour rate cuts—even if inflation drifts higher in the short term. That’s a bold stance, and one that aligns closely with the kind of framework Scott Bessent, Howard Lutnick, and ultimately Trump would want to see from a potential Fed chair. It’s worth remembering that Waller was appointed by Trump in 2020 and played a key role in shaping both the post-COVID tightening cycle and the sharp reversal seen in September 2024.

In that light, his latest comments might also be read as a strategic move—positioning himself as the natural successor to Powell, whose replacement process is reportedly about to get underway. Scott Bessent hinted as much in an interview with Ann Maria Hordern from Buenos Aires yesterday, where he also noted that the size and scope of current Chinese tariffs are becoming politically and economically unsustainable. A deal looks increasingly likely within the month, and markets are gradually adjusting to that possibility.

Now the focus turns to Powell’s speech on Wednesday. Will he lean into Waller’s shift, or maintain a more cautious tone? Given Waller’s track record in setting the tone for both hikes and cuts in recent cycles, he may well be worth listening to—again. From a market perspective, buying bonds in the belly of the curve remains the cleanest expression of this theme, or else buying Gold, Bitcoin or other USD-debasement bets make sense.

Chart 1: While we are waiting for better market liquidity