Three regional presidents argued for higher rates on the symposium's opening day. One dissenting voice, a former governor, called a hike unnecessary. Kevin Warsh delivers his first keynote as chair Friday morning with no signal yet of where he stands.
On the opening day of the Jackson Hole Economic Symposium, three Federal Reserve regional bank presidents made the case for higher interest rates within roughly three hours of each other. A fourth voice pushed back just as directly.
Cleveland Fed President Beth Hammack said around 10:39am ET that "now is the time to act," and argued a single rate increase would not be enough on its own. Kansas City Fed President Jeffrey Schmid, speaking earlier in the morning, described inflation as "stubborn" and "sticky" and questioned whether current policy is even restrictive at all. He floated the possibility of a hike at the September 16 FOMC meeting without committing to one. Chicago Fed President Austan Goolsbee added that "everybody should be on edge." He named his "biggest fear" as the possibility that inflation is "not under control" and could become de-anchored from the Fed's target.
Former Fed Governor Stephen Miran offered the dissent. He called a hike "weird" given what he described as "better inflation data," a notably softer read on the same information the three sitting presidents used to argue the opposite case.
The remarks land a day before Chair Kevin Warsh delivers his first Jackson Hole keynote as chair, scheduled for Friday at 10:00am ET. Asked about his approach heading into the speech, Warsh described it in exploratory terms: "I look at it like a blank piece of paper right now." He is expected to address broader economic themes rather than offer near-term guidance on the rate path.
Jackson Hole remarks from regional presidents, not all of whom vote on policy in a given year, are typically parsed by investors as a proxy for where committee sentiment sits heading into a meeting. Three presidents describing inflation as insufficiently contained, against one dissent from a policymaker who no longer sits on the Board, is not proof of how the FOMC will vote in September. It is evidence of how loudly the hawkish wing was willing to talk before the chair had said anything at all.
It is not yet clear whether Hammack, Schmid, and Goolsbee are describing a genuine consensus building toward a hike. It may simply be that the hawkish voices chose to stake out ground on day one, ahead of a chair who by his own account has not yet decided what he thinks.
The remarks landed against Core PCE inflation running at 3.3% year-over-year, confirmed the prior day, a figure both Schmid and Goolsbee referenced in describing inflation as not yet under control.
None of the four officials addressed each other directly, and none framed the day's remarks as a disagreement. But the hawks got three separate, on-the-record platforms before the chair said a word about where he stands. That imbalance is itself the story: for now, the loudest public signal to come out of the Federal Reserve this week is a hawkish one, three sitting presidents making the case for higher rates against a single dissent from a policymaker who no longer sits on the Board.