美联储内部鸽派集体转鹰，沃什首秀「左右为难」

Original Author: Long Yue

Original Source: Wall Street Sights

Trump chose him to cut interest rates. But shortly after he took office, his colleagues began discussing raising them.

The Wall Street Journal recently published an in-depth report by veteran reporter Nick Timiraos, timed right before the first interest rate meeting chaired by new Federal Reserve Chairman Kevin Warsh. Timiraos, who has long covered the Fed closely, is regarded by the market as a "Fed mouthpiece."

Timiraos wrote that Warsh walked into the meeting room at an extremely awkward moment. He publicly advocated for rate cuts last year, precisely a stance that won him Trump's favor. However, just after he officially assumed office, the direction of discussion within the Fed had quietly reversed—no longer "when to cut," but "whether to hike."

This reversal was not sudden. Since the beginning of this year, US inflation has risen instead of falling, breaking through 3%; the job market has strengthened again; supply bottlenecks brought by the AI construction boom and oil prices driven up by the Iran war have continuously added fuel to prices. The reasons that originally supported expectations for rate cuts have vanished one by one.

What Warsh faces is a committee he did not build, a set of forecasting tools he has long criticized, and a policy direction that runs counter to the wishes of the president who appointed him. This debut is destined to be anything but easy.

How Did the Dove Turn Hawkish?

The most telling sign is the shift in attitude of Fed Governor Christopher Waller.

Waller worried about a weakening job market all last year, even voting to cut rates this January against the majority of his colleagues. But just last month, he publicly stated that the latest data "pushed me in the other direction." He explicitly expressed support for removing the "easing bias" from the statement and bluntly stated: "I can no longer rule out the possibility of a rate hike at some point in the future."

Regarding some in the market still discussing a September rate cut, Waller's response was quite direct: "As a serious central bank official, you can't seriously talk about that."

The Middle Ground Is Also Shifting

If Waller represents a shift from the dovish side, the change in Governor Lisa Cook shows that even the "middle ground" is loosening.

Cook is not hawkish. She stated last month that maintaining rates unchanged was the right decision, and her base case remained that inflation would fall on its own. However, she added a condition—one that would have been almost impossible for her a year ago: She said if the inflation decline "doesn't materialize in a timely manner," she is "ready to raise rates."

This underlying worry is that five consecutive years of above-target inflation may have already begun affecting how businesses and workers set prices and negotiate wages, forming self-reinforcing expectations.

The Hawks Have Been Waiting for This Day

The hawks on the committee have actually long been dissatisfied.

When the Fed cut rates late last year, Cleveland Fed President Beth Hammack, Dallas Fed President Lorie Logan, and Minneapolis Fed President Neel Kashkari had dissented against the decision, believing the rationale for easing was already untenable.

In April this year, the three joined forces again. This time, their opposition wasn't to the rate decision itself but to the wording in the statement hinting that "the next step is more likely a cut"—they demanded its removal to show that a rate hike was equally an option.

Now, the data is tilting further in their favor. Hammack said this month that maintaining the status quo is reasonable, "but if recent trends persist, action may soon be needed." Logan went further: "I am increasingly concerned that it may be necessary to raise rates later this year."

The hawks also raised a noteworthy argument: As inflation rises, the inflation-adjusted "real interest rate" is actually falling, meaning the Fed's policy restricts the economy less than the nominal numbers suggest. In other words, merely "staying put" is, in a sense, already a form of easing.

Warsh's Dilemma

This Wednesday, the Fed is expected to keep the benchmark rate unchanged at 3.5% to 3.75%. But the real focus lies in two areas.

First is the statement's wording. The "easing bias" maintained for several months—suggesting the next move is more likely a cut—is expected to be removed, indicating that the probabilities of a cut and a hike are now seen as equal.

Second is the quarterly "dot plot." In March, over a dozen officials still expected at least one rate cut this year. This time, most officials are expected to project maintaining the status quo for the year, and some might even mark a rate hike on the plot.

Warsh himself has long criticized the Fed's over-reliance on "forward guidance," including tools like the dot plot. He could choose not to submit his own forecast or remove related hints from the official statement. But Timiraos points out that this operational distinction means little to investors—they will directly read the substance. The one who truly cares about this distinction is the president hoping for low rates.

Austan Goolsbee, President of the Chicago Fed, perhaps best summed up the current situation with a comment last month: "Now we face a rather serious inflation problem forming, but the job market is basically stable."

The result? Almost no one on the committee is advocating for rate cuts anymore. Warsh's debut could send a signal—the Fed's next move might be a rate hike. And all of this will be conveyed through tools he has long criticized, by a committee he did not personally select, pointing towards a direction his appointer does not want to see.