Fed's Internal Divergence Goes Public: Hawks vs. Doves

Summary

The Federal Reserve's internal disagreement over the next monetary policy move has become more public. Cleveland Fed President Hammack reiterated her hawkish stance, arguing that action is needed now and warning of financial stability risks including Treasury leverage and an AI bubble. Richmond Fed President Barkin, on the other hand, advocated holding rates steady, attributing inflation mainly to temporary shocks, but also warned that AI investment and supply chain issues could bring persistent price pressures.