Fed Official Warns of Potential Job Market Stress

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Federal Reserve official Christopher Waller cautioned that the central bank will be closely watching jobs data for signs of growing stress in the labor market. Waller, speaking at an event in Alabama, noted that the 'break-even' rate for the job market is currently likely around zero, meaning the economy may be at a point where job growth is flat. He also warned that periods of negative job growth might not necessarily indicate a recession, given the challenges in analyzing the job market after a series of economic shocks.

Why it matters

Waller's comments underscore the Fed's growing concerns about the resilience of the US job market as the economy grapples with high inflation, the lingering effects of the pandemic, and the fallout from the ongoing war in the Middle East. His remarks suggest the central bank is prepared to take more aggressive action, including further interest rate hikes, if the labor market shows signs of significant deterioration.

The details

In his speech at Auburn University in Alabama, Waller stated that the 'break-even' rate for the job market is currently likely around zero, meaning the economy may be at a point where job growth is flat. He also warned that periods of negative job growth might not necessarily indicate a recession, given the challenges in analyzing the job market after a series of economic shocks. Waller noted that changes to the job market make it difficult to analyze at present, and that the central bank will be closely watching jobs data for growing signs of stress.

• Waller spoke about the economic outlook and monetary policy at an event in Auburn, Alabama on Friday, April 19, 2026.

What they’re saying

What’s next

The Federal Reserve will be closely monitoring upcoming jobs data for signs of stress in the labor market, which could prompt further interest rate hikes to combat inflation.