White House NEC Director Hassett said policy rates can remain on hold, but at the July FOMC meeting Hamak and Kashkari argued for a 25bp hike, moving the debate from timing to how to judge the nature of inflation. Hassett emphasized growth and investment, saying current data do not justify a hike; the hawks warned that successive supply shocks—energy, tariffs—plus AI-driven data‑center investment could convert short-term shocks into sustained price‑setting and inflation expectations. If the hawk

White House NEC Director Hassett said policy rates can remain on hold, but at the July FOMC meeting Hamak and Kashkari argued for a 25bp hike, moving the debate from timing to how to judge the nature of inflation. Hassett emphasized growth and investment, saying current data do not justify a hike; the hawks warned that successive supply shocks—energy, tariffs—plus AI-driven data‑center investment could convert short-term shocks into sustained price‑setting and inflation expectations. If the hawkish bloc widens, market expectations for rate cuts could be pushed out; persistent White House opposition to hikes would increase scrutiny of Fed independence and its anti-inflation resolve.