Live Updates > Live Update Details
2025-12-18 17:33:35
[Inflation Alarms Remain, Fed Internal Divisions, Hidden Reefs and Storms on the Road to Rate Cuts] ⑴ Although the inflation rate has fallen from its highs, it remains consistently above the Fed's 2% target. Policymakers hope to see it decline further, but concerns about the job market are influencing their policy trade-offs. ⑵ Fed Chairman Powell stated that the impact of Trump's tariff rhetoric on inflation is expected to be a relatively short-lived, one-off price level change, but the Fed's responsibility is to prevent it from developing into a persistent inflation problem. ⑶ New York Fed President Williams pointed out that data shows trade policy has pushed up inflation this year, but its impact has been more moderate and persistent than he initially anticipated. ⑷ Fed Governor Waller believes that inflation will not accelerate again and stated that there are no signs that inflation will surge again in 2026. ⑸ However, some officials are more cautious. Kansas City Fed President Schmid emphasized that he prefers to keep monetary policy moderately restrictive given the continued significant inflationary pressures. ⑹ Atlanta Fed President Bostic also cautioned that it cannot be concluded that weakness in certain areas of the economy will necessarily translate into a significant reduction in inflationary pressures. (7) These remarks highlight the subtle differences within the Federal Reserve in assessing inflation risks and policy paths. Future interest rate decisions will be highly data-dependent, and any signs of recurring inflation could quickly reverse market expectations of easing.
