Fed officials divided ahead of Powell’s Jackson Hole Speech
Federal Reserve officials appeared cautious about a September rate cut as investors awaited Chair Jerome Powell’s keynote speech at the annual Jackson Hole symposium.
Beth Hammack said that with current data, she would not support a rate cut if the meeting were tomorrow. She emphasized keeping an “open mind” for incoming data.
Jeffrey Schmid said the economy is “in a really good spot” and that only very clear data would justify policy easing at this stage.
Raphael Bostic still has a cut penciled in for this year but admitted forecasts are uncertain. He stressed flexibility rather than commitment.
Austan Goolsbee called the September meeting “live” but warned that rising services inflation is a “dangerous data point” that makes cutting rates tricky.
Futures markets put a 70% chance on a quarter-point cut next month. Goldman Sachs expects Powell to support easing, though not explicitly confirming it on Friday.
Policymakers face a dilemma: weakening jobs suggest cuts, but inflation—still above the 2% target and pressured by tariffs—argues for caution.
Officials are divided on whether tariff-driven inflation is temporary or persistent. Hammack warned firms cannot hold off on price hikes indefinitely.
Schmid noted that lowering rates prematurely could risk feeding inflationary psychology, underscoring the Fed’s balancing act between growth and stability.(Disclaimer: This slideshow has been sourced from Reuters)
