The Federal Reserve System (Fed), the central bank of the United States, is showing signs of division at the crossroads of freezing the base rate and further raising it.
In the midst of this, local time on the 18th, hawkish personnel (preferring monetary tightening) as well as moderate personnel are paying attention to additional hikes.
According to the Federal Reserve Bank of Dallas (Fed), Dallas Fed President Lori Logan said at the Texas Bankers Conference in San Antonio that day, “Economic indicators suggesting that skipping (a rate hike) once is appropriate will come out in the coming weeks. It could be, but as of today we haven’t reached that point yet.”
Logan, who is classified as a centrist within the Fed, is one of 11 voting members of the Federal Open Market Committee (FOMC) this year.
“We’ve made some progress since raising interest rates in all of the last 10 FOMC meetings,” Logan said. he emphasized.
In an interview with the Financial Times (FT), St. Louis Fed President James Bullard, a representative hawk figure, said, “The rate of inflation is slower than expected. We should insure it by raising interest rates a little more.” claimed it was necessary.
Bullard said he had an “open attitude” to both an increase and a freeze, but was concerned that “a major risk is that inflation will not come down, or that it could go higher, as it did in the 1970s.”
Four or five senior Fed officials, including Presidents Logan and Bullard, Cleveland Fed President Loretta Mester and Fed Director Michelle Bowman, have recently spoken out in support of a rate hike in June.
This attitude is far from market expectations.
According to the Chicago Mercantile Exchange (CME) FedWatch, investors in the benchmark interest rate futures market expected a 72% chance of interest rate freeze in June until the previous day, but after President Logan’s speech, that number dropped to 62%.
But not all senior Fed officials support further increases, with Chicago Fed President Ostan Goolsby and Atlanta Fed President Raphiel Bostick making it clear they are leaning toward a freeze, and some senior officials are cautious. .
Fed director Philip Jefferson, who was recently nominated by President Joe Biden as vice chairman of the Fed, also left room for both an additional hike and a freeze that day.