world-economy

Fed Officials Split on Inflation Outlook as Supply Shocks Persist

Federal Reserve policymakers remain divided on the near-term inflation trajectory, with some officials expressing heightened concern about persistent price pressures while others downplay near-term risks.

Fed Governor Lisa Cook signaled readiness to adjust policy if inflation fails to moderate, citing artificial-intelligence build-out and recent supply shocks as key concerns. Other policymakers offered a more sanguine view, with Fed Chair Kevin Warsh and New York Fed President John Williams suggesting current rate levels remain appropriate despite upward demand pressures.

Producer price data offered some relief in June. Underlying inflation measures came in softer than forecast as pipeline pressures began easing. However, geopolitical tensions have since reignited commodity volatility, complicating the Fed's inflation assessment.

Canada's central bank held rates steady, reflecting similar uncertainty about the inflation trajectory across North America.