New Fed chair Walsh has adopted an early hawkish tone to build anti-inflation
credibility and respond to concerns about political interference. June nonfarm
payrolls rose 57k and CPI fell 0.4% MoM, easing near-term pressure to tighten,
but headline inflation remains 3.5% YoY—one weak print does not confirm a trend
reversal. TS Lombard global macro managing director Dario Perkins says Walsh's
hawkishness is not pure bravado: FOMC frustration over persistent inflation
predated his arrival, and Middle East energy risk could push prices back up. The
real policy divergence is over the next 6–12 months, not July or September. If
US employment reaccelerates, it would indicate current policy is insufficiently
tight and would undercut the view that AI-driven productivity can absorb demand,
forcing Walsh to deliver sustained rate hikes to validate his stance.
