Fed policymakers split ahead of Powell's Jackson Hole remarks as some back more rate hikes

Aug. 28 — Ahead of Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium, several Fed officials signaled divergent views on the inflation outlook and the path of interest rates, according to Bloomberg. The key divide is whether current policy settings are already restraining the economy enough. Kansas City Fed President Jeff Schmid said short-term rates may still be accommodative, suggesting the central bank has more work to do. Cleveland Fed President Beth Hammack also argued policy is not yet restrictive enough and that additional tightening would be needed to bring inflation back to 2% within a reasonable timeframe. Boston Fed President Susan Collins described current rates as "moderately restrictive." Chicago Fed President Austan Goolsbee said the Fed can continue to wait for more inflation data, though he warned that persistently high services inflation — or a renewed pickup — would be concerning. U.S. July PCE inflation rose 3.7% from a year earlier. Interest-rate futures show markets pricing roughly a 36% chance of a Fed rate hike in September. The Fed held the federal funds rate at 3.5% to 3.75% in July, with three officials voting for an increase. Powell is scheduled to speak at 10:00 p.m. Beijing time on Aug. 28.