"Fed Whisperer": The Fed's internal "unity" is no more, and an era of divergence may be dawning.

On July 10th, according to Jinshi Data, "Federal Reserve mouthpiece" Nick Timiraos's latest article stated that a debate is brewing within the Federal Reserve on how to deal with the risks brought about by Trump's tariffs. This may end a period of relative unity, and officials may disagree on whether new cost increases are a reason to keep interest rates high. In recent weeks, Federal Reserve Chairman Powell has hinted that the threshold for interest rate cuts may be lower than it appeared this spring, although no rate cuts are expected this month. Instead, Powell painted a "middle path": if inflation data is lower than expected or the job market is slightly weak, this may be enough for the Federal Reserve to start cutting interest rates before the end of summer. This standard is lower than the previously stricter threshold—when larger tariff increases triggered drastic inflation expectations, the Federal Reserve may have required more obvious signs of economic deterioration before considering interest rate cuts. Trump's tariff increases announced in April exceeded expectations, raising concerns about a stagflation situation of weakening economic growth and rising prices, disrupting the Federal Reserve's plan to resume interest rate cuts this year. But since then, two developments have driven a possible shift. First, Trump lowered some of the most extreme tariff increases; second, tariff-related consumer price increases have not materialized. This provides a key test of competing theories about whether tariffs will lead to inflation and raises internal divisions on how to manage forecasting errors. [Deep Tide TechFlow]