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🇺🇸 The Fed is turning hawkish just as the economy is cooling
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🇺🇸 The Fed is turning hawkish just as the economy is cooling

Macro Soup Newsroom Macro Soup Newsroom 3 min read

The Chicago Fed's National Activity Index slipped to −0.08 in July, a below-trend reading, just as Minneapolis Fed's Kashkari turned hawkish and Kevin Warsh drew fresh scrutiny as a possible Powell successor ahead of Jackson Hole.

Scatter plot of January 2011 Fed inflation vs unemployment projections; Warsh marked at ~8% unemployment and 2% inflation in the upper-right quadrant.
Archived FOMC submissions from Kevin Warsh's governorship show him alone projecting unemployment near 8% alongside 2% inflation looking to 2013 at the January 2011 meeting, a more pessimistic read on productive capacity than peers held ahead of his Jackson Hole debut. Source

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