Wall Street Journal reporter Nick Timiraos reports that the market will focus on the month-on-month change in July's inflation data to be released on Wednesday, as an increasing number of FOMC members have indicated that inflation readings over the next few months will determine whether they believe the forecast of “inflation falling back to 2% over the next two years” is still achievable without further rate hikes. However, Federal Reserve Chairman Waller has recently expressed skepticism abou

Wall Street Journal reporter Nick Timiraos stated that the market will focus on the month-on-month changes in the July inflation data to be released on Wednesday, as more and more FOMC members have indicated that the inflation readings in the coming months will determine whether they believe the forecast that “inflation will fall back to 2% over the next two years” is still achievable without further interest rate hikes. However, the Federal Reserve’s new chairman, Walsch, has recently expressed skepticism toward this framework, which ties policy-sensitive forecasts to high-frequency data. He previously remarked that he does not see much practical value in the Federal Reserve’s current “data-dependent” policy. In addition, Nick pointed out that part of the purpose of the working group established by Walsch appears to be to help build a new framework to replace the old one. But until the new framework is clearly defined, the old framework appears to still be in effect.