Odaily Planet Daily reports: Foreign media analysis indicates that nearly half of the Federal Reserve's policymakers no longer believe that maintaining borrowing costs at current levels alone will be sufficient to bring inflation back to the 2% target in the event of a sharp oil price surge following a war with Iran. The Fed's latest dot plot reveals individual policymakers' views on the interest rate path. The plot shows that the focus of internal Fed debates has rapidly shifted: previously centered on how long rates should remain unchanged before cutting, it has now turned toward growing concerns about potential rate hikes—some officials are even convinced that the Fed will need to raise rates.
In addition, projections released on Wednesday showed that Fed policymakers have become more pessimistic about inflation since March, reflecting the sharp rise in inflation since the outbreak of the war. The median forecast indicates that the PCE price index is expected to rise 3.6% year-over-year by year-end, up from 2.7% in March; core PCE price index is projected to increase 3.3% year-over-year, compared with 2.7% in March; and the unemployment rate is forecast to reach 4.3% by year-end, matching the actual reading in May and below the 4.4% projected in March. This suggests they are increasingly confident that the labor market has not weakened and does not require rate cuts to provide support. (Jin10)