Warsh faces his first major decision after taking office: whether to reverse last year’s rate-cut policy direction

July 13 report: Nick Timiraos, in an article in The Wall Street Journal titled “Federal Reserve megaphone,” said Federal Reserve Chair Kevin Warsh is facing his first major policy decision since taking office—whether to reverse the rate-cut cycle launched last year.

At the first meeting he chaired last month, the committee unanimously decided to keep interest rates unchanged. Because there was not enough internal momentum for immediate action at the time, reaching consensus was relatively easy. However, that consensus may be challenged in the coming weeks.

Analysis indicates that some of Warsh’s colleagues are growing increasingly concerned about inflation. Market consensus is that these officials will likely actively push for discussions regarding rate hikes at the next monetary policy meeting scheduled for July 28 to 29.

And this week, Warsh will hold an internal officials hearing in Congress, during which he will have the opportunity to influence the committee and build consensus.

At that time, the Fed will already have the latest June CPI inflation data, which will be the last batch of major economic reference points before the policy deliberation meeting.

Taken together, this inflation data will provide key grounds for the committee’s assessment of the economic situation, and it will also be the final key piece of the puzzle ahead of the Fed’s July interest-rate decision.

And once the report on this inflation data is released, it may directly determine whether the Fed begins a policy shift this month.

#美联储 # monetary policy