BlockBeats report: On August 5, hawkish voices within the Federal Reserve continued to intensify, with five of the twelve regional Fed presidents publicly expressing support for a rate hike since the July FOMC meeting, arguing that current monetary policy remains insufficiently restrictive and inflation risks have not yet fully subsided.
Among them, Cleveland Fed President Harker stated that she leaned toward a rate hike at the recent meeting because the current policy stance is “not restrictive enough”; Dallas Fed President Logan noted that even excluding recent shocks, core inflation remains near 2.5%, supporting a more restrictive policy.
Minneapolis Fed President Kashkari stated that to prevent high inflation from becoming entrenched, policy should be gradually tightened while awaiting more inflation and employment data, and he argued that "small, consecutive actions" are preferable to being forced into more aggressive measures in the future.
Kansas City Fed President Schmid stated that, given strong U.S. demand and investment, current monetary policy is not sufficiently restrictive and that a more tightened policy is needed to achieve the 2% inflation target.
St. Louis Fed President Musalem also supports rate hikes and warned that recent selling in the U.S. Treasury market reflects concerns about the Fed’s credibility, as ongoing supply shocks are driving broader price pressures felt by businesses and households.
Five of the 12 regional Federal Reserve presidents have clearly signaled a preference for rate hikes. Meanwhile, seven Fed governors, along with New York Fed President Williams and Philadelphia Fed President Harker, previously supported maintaining rates unchanged, indicating significant internal disagreement within the Fed over the future policy path.