Cleveland Fed President Beth Hammack signaled little appetite for near-term easing, telling Yahoo Finance that if the FOMC were meeting tomorrow she “would not see a case for reducing interest rates.” She stressed that inflation has been “too high for the past four years” and it’s been “trending in the wrong direction” currently, justifying a stance that remains “modestly restrictive.”

Hammack noted that the economy has so far shown resilience, with no significant signs of downturn that would warrant easier policy. Instead, she emphasized the Fed’s responsibility to ensure inflation expectations remain anchored, cautioning that premature cuts risk undermining that effort.

On tariffs, Hammack flagged that their effects are only beginning to filter through. Typically, it takes “three to four months” for the first signs to emerge, meaning the bulk of the impact will not be seen until 2026. She expects further pass-through of higher costs next year, adding another reason to proceed cautiously on easing.

Atlanta Fed President Raphael Bostic reiterated that his outlook for monetary policy remains centered on just one rate cut this year, consistent with guidance he has offered since early 2025. While Bostic emphasized he is not “stuck on anything,” he noted that forecasts carry wide confidence bands in the current environment of heightened uncertainty.

He pointed out that inflation has been moving “sideways” in the 2.5–2.8% range for much of the past nine months, persistently above the Fed’s 2% goal. This suggests progress on disinflation has stalled, keeping policymakers wary of easing too early. At the same time, the unemployment rate remains historically low, though cracks in the labor market are beginning to appear.

Bostic acknowledged the downward revisions to May and June payrolls as a sign of “lot less robust job creation,” though he cautioned against reading too much into one data point.

Kansas City Fed President Jeffrey Schmid, in a CNBC interview, stressed there was no urgency to cut rates. With inflation still hovering closer to 3% than 2% and the labor market in solid shape, Schmid said policymakers would need “very definitive data” before adjusting policy.

He argued that the “last mile” of returning inflation to target remains the hardest part and warned that lowering rates too soon could undermine public expectations, reigniting price pressures. “We got to be careful about what lowering short-term rates would do to the inflation mentality,” he noted.

Despite weaker jobs data in recent months, Schmid emphasized optimism among business contacts and questioned whether the current 4.25%–4.50% policy rate was significantly restricting growth. “I don’t know exactly what we are restricting,” he said.

FOMC minutes from July 29–30 meeting showed that while two members, Governor Christopher Waller and Michelle Bowman, dissented in favor of a rate cut, they remained isolated within the Committee. “Almost all participants” judged it appropriate to keep the federal funds rate at 4.25%–4.50%, highlighting the broad consensus to hold steady amid uncertainty.

The discussion revealed a split in emphasis: most officials still see upside inflation risks as “the greater of these two risks”, particularly given tariffs and the risk of unanchored expectations. But a couple of members warned that weakening employment should not be underestimated, reflecting the growing tension between Fed’s dual mandate.

The minutes flagged “considerable uncertainty” over the timing and scale of tariff effects, leaving policymakers braced for potential tradeoffs if inflation proves sticky while labor market softens. Rate decisions, thus, would depend on “each variable’s distance from the Committee’s goal and the potentially different time horizons over which those respective gaps would be anticipated to close.”

Full FOMC minutes here.