"Fed Whisperer": Shift in Fed's Internal Winds, Policy Path Turns from Rate Cut Expectations to Hiking Assessment

Odaily Planet Daily News "Fed Whisperer" Nick Timiraos pointed out in a Wall Street Journal article that the discussion within the Federal Reserve regarding the interest rate path has undergone a clear shift. Currently, the debate is no longer primarily about when to resume rate cuts, but has begun to address under what conditions rate hikes might be necessary. Since the Fed began issuing policy statements in 1994, disagreements over how to describe the policy direction (rather than actual interest rate changes) have been rare.

Three regional Fed presidents, including Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari, opposed retaining the wording that "the next move is more likely to be a rate cut" in this week's policy meeting, arguing that the next interest rate adjustment could be either a hike or a cut. Outgoing Fed Chair Jerome Powell stated that the committee is gradually shifting from a "cutting bias" to a "neutral stance," and noted that if rate hikes become necessary in the future, the Fed would first move to neutral and then signal a hike. (WSJ)