The Federal Reserve’s hawkish camp has expanded, with five regional Fed presidents publicly supporting interest rate hikes after the July meeting.

Hawkish sentiment within the Federal Reserve is growing, with 5 of the 12 regional Federal Reserve Bank presidents publicly signaling their preference for interest rate hikes after the July policy meeting. They contend that current monetary policy is not restrictive enough and inflation risks have not fully faded. Among these officials, Cleveland Fed President Hamrick said she favored a rate hike at the latest meeting, citing the current policy stance is "not sufficiently restrictive"; Dallas Fed President Logan noted that even excluding recent shocks, core inflation remains near 2.5%, backing tighter policy. Minneapolis Fed President Kashkari stated that to prevent high inflation from becoming entrenched, policy should be gradually tightened while awaiting more inflation and employment data, adding that "small, consecutive actions" are better than being forced to take more drastic measures later. Kansas City Fed President Schmid argued that given the continued strength in U.S. demand and investment, current monetary policy has not reached a sufficiently restrictive level, and tighter policy is needed to achieve the 2% inflation target. St. Louis Fed President Musalem also supports rate hikes, warning that the recent sell-off in the U.S. Treasury market reflects market concerns about the Fed’s credibility, and ongoing supply shocks are driving broader price pressures on businesses and households. In total, 5 of the 12 regional Fed presidents have now clearly signaled their leaning toward rate hikes. Meanwhile, 7 Federal Reserve Board governors, New York Fed President Williams, and Philadelphia Fed President Harker previously backed keeping interest rates unchanged, highlighting significant divisions within the Fed over its future policy path.