"Fed Mouthpiece": International situation and domestic employment put the Federal Reserve in a dilemma, leaving it with no choice but to wait and see

BlockBeats News, March 8, Nick Timiraos, a Wall Street Journal reporter known as the "Fed Whisperer," wrote that what the Federal Reserve fears most has always been being forced to choose between fighting inflation and protecting employment. Friday's employment report brought this dilemma one step closer. Nick cited Minneapolis Fed President Neel Kashkari, who has a voting right at this year's FOMC meetings, recently warning that the current situation may be becoming a "replay" of the Russia-Ukraine conflict, and reminded the Fed not to repeat the mistake of judging inflation as a temporary rise in 2021.

Regarding the Fed's next move, Timiraos judged: "At present, Fed officials may just wait and see. Fed Chair Jerome Powell urged other (FOMC) members to cut rates three times by the end of last year, but each rate cut triggered increasing controversy within the Fed's 12-member rate-setting committee (FOMC). Officials have made it clear that they are not in a hurry to adjust rates at the meeting later this month, and even if a month's data is concerning, it is unlikely to shake this stance."

Timiraos believes that if the unemployment rate continues to rise in the coming months, the Fed may restart rate cuts around mid-year. But if inflation data picks up again before then, internal resistance will clearly increase. He concluded that a central bank facing both weakening employment and the risk of inflation reigniting "has almost no good options."