Fed Megaphone: The core of the Fed’s disagreement lies in the inflation outlook, not the policy direction.

According to Jinshi News, on July 9, Wall Street Journal reporter Nick Timiraos said that the Fed's June meeting minutes showed that disagreements among officials mainly stemmed from different assessments of the future economic outlook, rather than fundamental conflicts over interest rate hike or cut strategies.

Two possible scenarios have formed within the Fed: if inflation remains high, almost all officials believe that higher interest rates need to be maintained, and even further tightening is needed; but if inflation quickly falls back to the 2% target level, almost all officials also believe that the current interest rate can be maintained, and even rate cuts could happen in the future. He believes that the phrase "quickly falls back to 2%" is very critical, leaving room for policy adjustment for the Fed. Currently, the real issue officials are focusing on is whether inflation will continue to rebound or re-enter a downward track.

Timiraos concluded that the Fed's next move still depends on economic data, especially inflation performance. The market had previously bet on rate cuts, but the latest minutes show that there is still considerable uncertainty in the policy outlook.