Fed Voice: The core of the Fed ' s differences is inflation prospects, not policy directions

On 9 July, a Wall Street Journal journalist, Nick Timiraos, stated that the minutes of the June meeting of the Federal Reserve showed that differences among officials arose mainly from differing judgements about future economic trends, rather than from fundamental conflicts over interest-rate hikes or interest-rate strategies. There are two possible scenarios within the Fed: if inflation continues to be high, almost all officials agree that higher interest rates need to be maintained or even further tightened; but if inflation quickly returns to the target level of 2 per cent, almost all officials also believe that current rates can be maintained and even future rates reduced. In his view, the phrase “falls back to 2 per cent soon” was crucial, and space for policy adjustments was reserved for the Fed. The real concern of officials is whether inflation will continue to rebound or whether it will return to a downward trajectory. Timiraos summed up that the Federal Reserve ' s next move still depended on economic data, particularly on inflation performance. The market had previously been charged lower interest rates, but the latest record showed that there was still considerable uncertainty about the policy outlook。