Fed's Bostic:Eventually got behind the cut this week.Fed's Hammack says would not have cut

Fed’s Bostic is saying: Eventually got behind the cut this weekDual mandates are in tensionsupported a cut because it still feels we are in restrictive territory.Need to get inflation to 2%.Lesson half of upward price pressure is being reported as from tariffs.We have to see more progress before comfortable getting rates to neutral.Really like Powell’s fog analogy, preferable to go lower one uncertainAlso we are not completely flying blind.Some of the labor market shift is due to structural changes like technology, immigration, trade policyRecession risk is not on people’s mindsGlad chair Powell added words saying December rate cut not a foregone conclusion.Accurately reflected range of views on the committee.That info needed to be out in public domain.Every meeting is liveThe median of the Dot plot is math, it’s not decision process. We are going to be data -dependent and make sure decision is appropriate.Difficult to make a forecast now, everyone trying to do their best, we may have different interpretations.Data can help us come to a closer agreement on where the world is so we can coalasce on policy.We will need to double down on that effort to get data in coming weeks.Meanwhile Cleveland Fed’s Hammack is also speaking and she says She would not have cut rates.Challenged on both sides of mandate.Some emerging signs of softness in the labor market, including layoff announcements.Now around estimate of neutral rateSays that rates are barely restrictiveNeed to maintain some restriction to bring down inflation.Tariffs are just one piece of inflation puzzle, also electricity, insurance.Little to no progress on core services ex housing, which plus the tariff creates more concerning pictureAll of us going out into Fed districts, getting a robust picture of economy.Don’t want to under state importance of gold standard government data.September cut was because of sharp drop in payrolls.Since September, data to me says it’s not obvious shift in the labor market. The change is on demand-side.Still time until December meeting, more data to come.Consumption data has been healthy, though seen K-shaped economy.Hearing more about pressure from lower income families.Want to be attentive to labor picture.Want to be open-minded to seeing signs of labor market softness.We are missing on inflation side more than on labor side.We need to stay restrictive.Market tends to over focus on medium Fed rate path dot.The Dot plot gives you a sense of range of viewpoints.You are hearing different viewpoints because it’s not clear what the right answer is. It’s a robust conversation at the Fed.In the FOMC room, people change their viewpoints, adaptBoth Bostic and Hammack are nonvoting members in 2025. Hammack will be a voting member in 2026, while Bostic will be a voting member in 2027. However both are leaning toward the hawkish camp – or less dovish. .Stocks are dipping with the Dow industrial average now negative at -0.08%. The S&P is still up by 0.21% while the NASDAQ index is up 0.64%.The Fed is driving in the fog.
This article was written by Greg Michalowski at investinglive.com.

🔗 Read Full Article