"Federal Reserve Mouthpiece": Inside the Federal Reserve's sentiment shifts, policy outlook shifts from rate cut expectations to rate hike assessments

Odaily Planet Daily reports that Nick Timiraos, “the Fed’s mouthpiece,” wrote in The Wall Street Journal that internal discussions within the Federal Reserve about the path for interest rates have shifted noticeably. The focus is no longer primarily on when to restart rate cuts, but instead on under what conditions a renewed rate hike might be required. Since the Fed began issuing policy statements in 1994, disagreements over how to describe the policy direction (rather than actual interest rate changes) have been rare.

Three regional Federal Reserve presidents—including Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari—oppose continuing to use language in this week’s policy meeting that “a rate cut is more likely next,” believing that the next interest-rate adjustment could be either a hike or a cut. Outgoing Fed Chair Jerome Powell said the committee is gradually shifting from a “bias toward rate cuts” to a “neutral stance,” and noted that if a rate hike is needed in the future, the Fed would first move to neutrality before issuing a rate-hike signal. (WSJ)