Fed Mouthpiece: Fed Divergence Centers on Inflation Outlook, Not Policy Direction

CoinFeed July 9 news, according to Sina Finance, Wall Street Journal reporter Nick Timiraos stated that the Fed’s June meeting minutes show that the differences among officials mainly stem from differing judgments on future economic trends, rather than a fundamental conflict over rate hike or cut strategies. Two possible scenarios have emerged within the Fed: if inflation remains persistently high, almost all officials believe the need to maintain higher interest rates, or even further tighten policy; but if inflation quickly falls back to the 2% target level, almost all officials also believe that the current interest rate can be maintained, or even cut in the future. He believes that the phrase ‘quickly falls back to 2%’ is very key, preserving policy adjustment space for the Fed. Currently, the real concern among officials is whether inflation will persistently rebound or re-enter a downward trajectory.