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2025-07-29 16:50:53
[Internal divisions within the Federal Reserve escalate: the horn of rate cuts and the hawk-dove duel under the fog of data] ⑴ The recent statements of two Federal Reserve directors foreshadow potential differences in policy making, which is rare in the past three decades. ⑵ Director Waller advocates aggressive rate cuts and believes that action should be taken at the end of July, otherwise the Federal Reserve may lag behind the situation. He pointed out that economic risks are rising and the job market is in a "marginal state." ⑶ Waller emphasized that Trump's tariff remarks only pushed up prices once and would not bring about sustained inflation. Even if the 10% tariff continues, it will only increase inflation by 0.75% to 1%, and the cost will be borne by consumers, foreign producers and importers. ⑷ Director Bowman also believes that the time for rate cuts is approaching and said it is time to consider adjusting the policy interest rate. ⑸ Bowman pointed out that inflation is steadily returning to the 2% target, and the potential trend of core PCE inflation is closer to this target. He believes that Trump's tariff remarks have a "minimal" impact on inflation. ⑹ Both directors emphasized that the independence of the central bank is crucial and is not subject to political interference, indicating that policy making will be based on economic data rather than external pressure. ⑺ Their different emphases reflect the Fed’s complex considerations on economic risk assessment and the pace of interest rate cuts, which deserves the market’s close attention.
