Fed's Bostic and Hammack comment the US monetary policy 🔍Divided Fed?

Fed Members Bostic and Hammack commented the US monetary policy today, but the tone of the bankers seems to be opposite; Bostic signals still to restrictive policy, while Hammack thinks that the Fed needs to be restrictive at the moment.

Raphael Bostic 

• This is the most difficult time to make a forecast.

• Every meeting is live. Don’t get ahead of us.

• The median of the dot plot is math, it’s not a decision process.

• I am glad Powell said that a December cut is far from a foregone move.

• The Chair’s message accurately reflected the range of views on the committee; that information needed to be public.

• Recession risk is not on people’s minds.

• Some of the labor market changes are cyclical, but slower isn’t the same as weak.

• Some of the labor market shift is due to structural changes like technology, immigration, and trade policy.

• Reserve bank data is important, given the lack of government reports.

• We are not completely flying blind.

• We have to see more progress before being comfortable getting rates to neutral.

• Less than half of upward price pressures are being reported as from tariffs.

• I supported the cut because I still feel we are in restrictive territory.

• Our mandates are in tension.

• I eventually got behind the cut this week.

Beth Hammack 

• We have seen some pressure recently in the repo markets.

• In the FOMC room, people change their viewpoints and adapt.

• You are hearing differing viewpoints because it's not clear what the right answer on rates is.

• We are not on a preset course.

• We are missing on the inflation side more than on the labor market side; we need to stay restrictive.

• Consumption data has been healthy, though seeing a K-shaped economy.

• Since September, the data to me says it's not obvious that the shift in the labor market is on the demand side.

• Inflation is broader than tariffs. Core services are strong.

• I see some emerging signs of softness in labor, including layoff announcements.

• There’s little to no progress on core services ex-housing, which, plus the tariffs, creates a more concerning picture.

• Tariffs are just one piece of the inflation puzzle; there is also electricity and insurance.

• Fed’s policy is barely restrictive, if at all.

• We need to maintain some restriction to bring down inflation.

• We’re now around my estimate of neutral.

• I would’ve preferred to hold rates steady this week.

• We’re challenged on both sides of the mandate.

Source: xStation5