Federal Reserve voters are divided on policy ahead of September. Dovish/softer
signals: Governor Bowman said a prolonged rise in oil prices increases the
likelihood of reassessing the risk balance. Chair Powell called policy at the
high end of neutral or mildly restrictive, noting a firmer labor market and
“somewhat unruly” inflation, and said holding may be appropriate. President
Williams and Vice Chair Jefferson said they want more incoming data; Jefferson
added policy is well positioned to support the labor market while guiding
inflation toward 2%. Governor Barr flagged a September re‑examination and said
if inflation hasn’t slowed sufficiently he would favor decisive hikes. Governor
Waller said give disinflation time and he is willing to wait to see improvement.
Governor Paulson said properly calibrated policy should produce more signs of
disinflation but persistent core upside would warrant tighter policy. Hawkish
signals: Kevin Warsh said policymakers must be sure core inflation is falling
clearly and fast enough or “we have work to do." Hammack said now is the time to
act. Governor Cook said he would support hikes if necessary but they may not be
required. Logan warned that without policy restraint inflation could remain
above target absent a shock. Kashkari identified the Iran conflict as a material
upward driver of inflation and said a prolonged conflict would reduce confidence
inflation will return to target.
