Fed Dissenters Reject Rate-Cut Bias, Cite Oil-Shock Risks
Two Federal Reserve officials dissented over the latest FOMC policy statement, arguing it was no longer appropriate for the central bank to signal that its next move was still likely to be an interest-rate cut. Hammack said the Fed’s easing bias no longer fit the outlook because inflation pressures were broad based and energy was pushing up prices.
Minneapolis Fed President Neel Kashkari said the statement should instead acknowledge that the next move may be a hike or a cut, reflecting uncertainty around an oil shock tied to the Strait of Hormuz. He warned that a prolonged disruption could trigger a major price shock, lift inflation expectations and force aggressive rate increases to protect the Fed’s 2% target, while even a quick resolution could keep inflation high enough to delay any rate cuts.
From the sources (16 posts)
@zerohedge*HAMMACK: DISSENTED OVER 'ADDITIONAL ADJUSTMENTS' LANGUAGE *FED'S HAMMACK SAYS FOMC'S EASING BIAS NO LONGER APPROPRIATE
@firstsquawkFED’S HAMMACK: DISSENTED AGAINST FED KEEPING AN EASING BIAS IN STATEMENT || INFLATION PRESSURES BROAD BASED, ENERGY DRIVING UP PRICES || FED’S ‘CLEAR EASING BIAS’ NO LONGER APPROPRIATE GIVEN OUTLOOK
@deitaoneKASHKARI: FED SHOULD SIGNAL NEXT MOVE MAY BE A HIKE OR CUT
@zerohedge*KASHKARI: FORWARD GUIDANCE IN FOMC STATEMENT NOT APPROPRIATE *KASHKARI: UNANCHORED INFL.EXPECTATIONS WOULD REQUIRE RATE HIKES
@firstsquawkFED’S HAMMACK: ECONOMY HAS BEEN RESILIENT SO FAR IN 2026 || SEES UPSIDE INFLATION RISK, DOWNSIDE JOB MARKET RISK || UNCERTAINTY AROUND ECONOMY, POLICY PATH HAS RISEN
@deitaoneKASHKARI WARNS: OIL SHOCK COULD FORCE RATE HIKES Minneapolis Fed President Neel Kashkari dissented at the latest FOMC meeting, arguing the Fed should flag potential rate hikes due to risks tied to the Strait of Hormuz. He warned a prolong
@deitaone*KASHKARI: UNANCHORED INFL.EXPECTATIONS WOULD REQUIRE RATE HIKES
@firstsquawkMINNEAPOLIS FED'S KASHKARI DISAGREED AT THE FOMC MEETING, ARGUING THAT UNCERTAINTY IN THE STRAIT OF HORMUZ SHOULD BE REFLECTED IN THE FED'S RATE HIKE STATEMENTS.
@firstsquawkKASHKARI WARNED THAT A SIGNIFICANT PRICE SURGE COULD THREATEN INFLATION EXPECTATIONS, POSSIBLY FORCING THE FED TO RAISE RATES MULTIPLE TIMES TO MAINTAIN ITS 2% INFLATION GOAL.
@firstsquawkKASHKARI WARNED THAT A LONG CLOSURE OF THE STRAIT COULD UPSET INFLATION EXPECTATIONS AND NEED A STRONG POLICY ACTION.
@firstsquawkKASHKARI SAYS THAT EVEN IF THE STRAIT OF HORMUZ OPENS SOON, INFLATION WILL REMAIN HIGH, REQUIRING RATES TO STAY UNCHANGED FOR A LONG TIME.
@firstsquawkKASHKARI STATED THAT BEFORE THE WAR, INFLATION WAS EXPECTED TO DROP, JUSTIFYING ANOTHER RATE CUT THIS YEAR; HOWEVER, MARCH'S EVENTS DID NOT SIGNIFICANTLY CHANGE THE POLICY STATEMENT.
@wsjMinneapolis Fed President Neel Kashkari wrote that heightened inflation risks from the Iran war led him to object to the Fed policy statement.
@businessTwo Federal Reserve officials said they dissented over this week’s policy statement because it was no longer appropriate to signal the Fed’s next move was still likely to be an interest-rate cut.
@reutersFed's Hammack says no longer appropriate to signal rate cut bias
@reutersKashkari: Uncertainty around oil shock means Fed should acknowledge risk of rate hikes