'Fed Whisperer': International Situation and Domestic Employment Put the Fed in a Dilemma, Forced to Wait and See

BlockBeats News, March 8: Nick Timiraos, a Wall Street Journal reporter known as the 'Fed Whisperer,' wrote that the Federal Reserve's greatest fear has always been being forced to choose between fighting inflation and protecting employment. Friday's employment report has brought this dilemma one step closer. Nick cited Minneapolis Fed President Neel Kashkari, who holds a voting seat on this year's Federal Open Market Committee (FOMC), warning that the current situation might be becoming a 'replay' of the Russia-Ukraine conflict. He also reminded the Fed not to repeat the mistake of 2021 when it misjudged inflation as a temporary rise. Regarding the Fed's next steps, Timiraos assessed: 'At present, Fed officials may only 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 one month's data raises concerns, it is unlikely to shake this stance.' Timiraos believes that if the unemployment rate continues to rise in the coming months, the Fed may resume rate cuts by mid-year. However, if inflation data surges again before then, internal resistance will significantly increase. He concluded that a central bank facing both weakening employment and the risk of resurging inflation 'has almost no good options.'