"Fed Whispers": Shift in Sentiment Within the Fed – Policy Path Moves from Rate Cut Expectations to Assessing Hikes

Odaily Planet Daily reports "Fed Whisperer" Nick Timiraos wrote in The Wall Street Journal that the discussion within the Federal Reserve regarding the interest rate path has taken a clear turn. The debate is no longer centered on when to resume rate cuts, but has shifted to discussing under what conditions a rate hike might be necessary. Since the Fed began issuing policy statements in 1994, disagreements over how to describe the policy direction (rather than the actual change in interest rates) have been rare.

Three regional Fed bank presidents, including Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari, opposed retaining the language suggesting a "next move is more likely a cut" in this week's policy meeting, arguing that the next rate adjustment could be either a hike or a cut. Outgoing Fed Chair Jerome Powell stated that the committee is gradually shifting from a "cut bias" toward a "neutral stance," and added that if a rate hike becomes necessary in the future, the Fed would first move to neutral before signaling a hike. (WSJ)