Economist: Fed statement or hidden hawk pen

On 30 July, economist Claudia Sahm stated that unless more substantial progress was made in inflation, post-session statements were likely to imply an imminent increase in interest rates. Following the first meeting in Walsh in June, the length of statements issued by the Federal Open Market Commission was significantly lower than in previous practice. The communiqué rejected the previous repertoire and focused on a simple statement that “the Commission will achieve price stability”. Sahm stated that, despite Walsh ' s rejection of forward-looking guidance, she expected that the statement would provide clearer leads on the policy direction of the Fed. Specifically, she anticipated the following wording in the statement: “Despite recent improvements, inflation is still above the Committee's target of 2 per cent, partly because of the supply shocks caused by the conflict in the Middle East and tariffs, as well as the strong growth in artificial intelligence-related demand. If the labour market remains stable while inflation remains high, appropriate tightening policies may soon be required to achieve price stability.” Sahm also argued that the statement expressed the outlook for the job market more optimisticly, stating that its situation “was generally in line with the goal of full employment”。