New Fed Whisperer: Inflation Data "Not Hot, Not Cold," Fed Gets a Breather but Path Ahead Unclear

Nick Timiraos noted that U.S. July inflation data met expectations, with market bets on a Fed rate hike in September falling below 50%, easing short-term rate hike pressure. However, internal divisions within the Fed between hawks and doves remain sharp, with over half of voting members leaning toward a rate hike, and the San Francisco Fed President hinting that a one-time 50 basis point hike might be necessary if inflation spirals out of control. Chair Warsh's stance remains ambiguous, and the true policy direction may not be revealed until August inflation data is released on September 11.