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2025-08-01 20:02:50
[Major Disagreement! Why Did Two of the Fed's Hawkish Officials Sudden U-turn?] ⑴ Fed officials Waller and Bowman successively expressed views that diverged from their previous hawkish stances. ⑵ Waller stated that he believed a 25 basis point cut in the policy rate was appropriate and that monetary policy should now be closer to neutral rather than restrictive. ⑶ While acknowledging that the job market appears strong on the surface, other data suggest that downside risks to the labor market are increasing. ⑷ Bowman similarly believed that with weakening economic growth and labor market dynamism, it was time to gradually shift the policy stance toward neutrality. ⑸ She believed that the inflationary shock from tariffs was one-off, and therefore the Fed should prioritize risks to its employment mandate. ⑹ Both officials stated that delaying action could lead to a deterioration in the labor market and a further slowdown in economic growth. ⑺ Their comments contrasted sharply with the Fed's previous "wait-and-see" approach, suggesting significant internal disagreement over the future direction of monetary policy.
