Federal Reserve Megaphone: Fed Gap Central on Inflation Outlook, Not Policy Path

BlockBeats News, July 9th, The Wall Street Journal reporter Nick Timiraos stated that the minutes of the Federal Reserve's June meeting showed that the officials' divergence mainly stemmed from different assessments of the future economic trajectory, rather than a fundamental conflict over rate hikes or cuts.

Two possible scenarios have emerged within the Federal Reserve: if inflation remains stubbornly high, nearly all officials believe that a need for higher rates persists, even further tightening policy; but if inflation quickly retreats to the 2% target level, nearly all officials also believe that the current rate can be maintained, and even rate cuts may be considered in the future. He noted that the phrase "quickly retreats to 2%" is crucial, as it provides the Fed with policy flexibility. Currently, officials are truly concerned about whether inflation will sustain its rebound or slip back into a decline.

Timiraos concluded that the Fed's next steps still depend on economic data, especially inflation performance. The market had previously bet on rate cuts, but the latest minutes show that there remains significant uncertainty regarding the policy outlook.