Integrated Partners CIO Steve Corano said the Fed’s decision to hold rates was
in line with expectations but noted dissenting votes favoring a hike rose
further versus the prior meeting. He flagged that remarks from Wosh at the
post-meeting press conference will be key for near-term policy guidance. Wosh, a
supply-side economist, argues that if inflation is primarily driven by energy
prices then rate hikes would only suppress demand and would not increase oil
supply. Corano said until core inflation gives clearer direction the Fed’s
baseline is to wait for more data. Five working groups Wosh set up are due to
publish preliminary findings in September and final reports in December,
providing the Fed additional runway to remain on hold absent a major shock.
