A signal, not a promise: Waller, Bailey and the ECB account on the same day

Serguey Asael Shinder09 October 2026, 08:023 min read

On 8 October three central-bank texts appeared within hours: Fed Governor Christopher Waller and Bank of England Governor Andrew Bailey both spoke at the Central Bank of Türkiye's forum in Istanbul, and the ECB published the account of its September meeting. Read together, they set out a shared doctrine for how to talk about future rates during a supply shock — and show where the three institutions differ.

The common rule: direction yes, path no.

• Waller distinguishes three options — silence, strong forward guidance, and a "signalling option" that indicates roughly how far rates should move over a period without fixing pace or step size. He says the Fed's dot plot now serves that purpose: 16 of 18 participants expect at least one more hike in 2026, and further hikes "do not need to come at consecutive meetings".
• Bailey says he remains "sceptical of unconditional promises about future interest rates. The world is too uncertain", but wants central banks to explain how policy would respond under different conditions.
• The ECB account records a unanimous 25 basis-point rise to a 2.50% deposit rate, "without a pre-commitment to any particular rate path", while markets priced 84 basis points of hikes by end-2027.

Why the doctrine fits this shock. All three texts describe the same problem. A supply shock pushes inflation up and output down; the textbook says look through it, but only if expectations hold. Waller worries about expectations after what will soon be five and a half years above target; Bailey warns that rapid succession of shocks makes anchoring harder; the ECB account notes five-year household expectations at a survey high of 2.5% and an energy shock that is now in refined products and gas rather than crude. When the shock's duration is the unknown, committing to a path is a bet on geopolitics. Signalling a destination while keeping timing data-dependent is the way to tighten without making that bet.

Where they differ.

• Emphasis. Waller's speech is about the policy rate. Bailey's is about the system that has to absorb rate moves — leveraged buyers of government bonds, AI-related exposures, the case for more central clearing and minimum haircuts. The ECB's discussion sits between: it debates whether credit growth reflects strength or firms and households borrowing to cover higher costs.
• Tool. The Fed has a published dot plot to do the signalling; the ECB has no equivalent and lets market pricing and its account carry the message; Bailey offers scenario-based explanation rather than a distribution of rates.

What this means for markets. Expect fewer calendar clues and more conditional language from all three. For pricing, the useful variable becomes each institution's view of persistence — energy in Europe, AI-linked prices and expectations in the US — because that, not a stated path, will decide how many of the signalled moves arrive.

This analysis draws on: Federal Reserve, Waller, "The Signaling Value of the Summary of Economic Projections" (8 October 2026) — https://www.federalreserve.gov/newsevents/speech/waller20261008a.htm ; Bank of England, Bailey, speech at the Istanbul Economic Forum (8 October 2026) — https://www.bankofengland.co.uk/speech/2026/october/andrew-bailey-speech-at-the-istanbul-economic-forum-central-bank-of-the-republic-of-turkey-istanbul ; ECB, account of the 9–10 September 2026 meeting (8 October 2026) — https://www.ecb.europa.eu/press/accounts/2026/html/ecb.mg261008~a10153d090.en.html