WSJ: Fed Internal Discussion Shifts from ‘When to Cut Rates’ to ‘When to Raise Rates’

BlockBeats News, May 3rd, according to WSJ report, there has been a notable shift in the Federal Reserve's internal discussions on the interest rate path. After months of rate cut expectations, officials have started discussing "under what conditions a rate hike would be needed".

The report stated that at the latest interest rate meeting, three regional Fed presidents publicly opposed continuing to retain the policy wording of "the next step is more likely to be a rate cut". Dallas Fed President Lorie Logan stated that future interest rate adjustments "could be a rate hike or a rate cut".

Outgoing Federal Reserve Chairman Powell also acknowledged that the Fed's internal stance is gradually shifting from being "dovish" to a "neutral position," and stated that if a rate hike is needed in the future, the Fed would first transition to a neutral guidance before leaning towards a rate hike.

The report pointed out that persistently high energy prices, the crisis in the Strait of Hormuz, and escalating Middle East tensions are rekindling U.S. inflation risks and weakening market expectations of a rate cut later this year.