Fed Chair Janet Yellen and New York Fed President Bill Dudley (joined by consistent hawk, Cleveland Fed President Loretta Mester) have made it clear they believe the recent slowdown in inflation is temporary. They appear ready to forge ahead with more rate hikes, with the next one perhaps coming in September.
Chicago’s Charles Evans, Minneapolis’ Neel Kashakri, Dallas’ Robert Kaplan, and St. Louis’ Jim Bullard, on the other hand, are showing far more concern about inflation, and appear to be in favor of an extended pause in the rate hike cycle.
Kashkari, in fact, voted against both the March and June rate hikes.
The Fed has more or less promised one more rate hike this year, but following through on that could shatter the consensus Yellen has built since taking over – a move in September could draw dissents from Evans and Kaplan, in addition to Kashkari (Bullard has no vote this year).
Quad 7 Capital will be following this closely.