WSJ Fed insider says “An Important Shift in Fed Officials’ Rate Stance Is Under Way”

Nick Timiraos is acknowledged as an ‘insider’ when it comes to the Federal Reserve’s Federal Open Market Committee (FOMC).

He writes the Fed is likely to pause rate increases in September, then take a harder look at whether more are needed.

  • Some officials still prefer to err on the side of raising rates too much, reasoning that they can cut them later.
  • Now, though, other officials see risks as more balanced. They worry about raising rates and causing a downturn that turns out to be unnecessary or triggering a new bout of financial turmoil.
  • The shift toward a more balanced bias on rates is driven by data showing easing inflation and a less overheated labor market. In addition, the unusually rapid rate increases implemented over the past 1½ years are expected to continue crimping demand in coming months.

Here is the link for a more details discussion. The expectation of a pause in September is almost unanimous.

The latest prices from the CME FedWatch tool:

This article was written by Eamonn Sheridan at Source