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A simple majority (7) among 12 voters is needed to enact a change in the Fed funds rate. While the July 29 FOMC meeting showed 3 dissents in favor of hikes, we identify six additional members (below in gray) who are most likely, based on past comments, to break away from the Fed’s wait-and-see posture, in favor of rate hikes . Earlier in the year, Governor Waller shifted to a neutral posture (from an easing bias), and recently indicated openness to another hawkish shift should the current above-target inflation readings prove persistent. Governors Jefferson and Cook both have suggested that hikes were on the table should inflation not slow “soon.” A panoply of hawkish remarks suggests that Chair Warsh could vote to push hikes over the line , a shift we expect to come following the Fed’s annual Jackson Hole Symposium at the September 16 meeting.
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AI analysis
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Key arguments
- A simple majority of 7 among 12 voters is needed to change the Fed funds rate.
- July 29 FOMC meeting had 3 dissents in favor of hikes, indicating growing support.
- Six additional members are likely to break from wait-and-see posture based on past comments.
- Governor Waller shifted to neutral and indicated openness to hawkish shift if inflation persists.
- Governors Jefferson and Cook suggested hikes are on the table if inflation doesn't slow soon.
- Chair Warsh could vote to push hikes over the line following Jackson Hole Symposium.
Risks
- Inflation may not prove persistent, reducing the case for hikes.
- Fed officials may maintain wait-and-see posture despite hawkish remarks.
- Market expectations could diverge from Fed actions, causing volatility.