None backed the rate cut Trump has been pushing for
A Duke University survey of 32 former Federal Reserve governors, regional presidents and staffers found 29 endorsed an interest rate hike ahead of the Fed’s expected rate announcement, with two respondents declining to answer and one saying the central bank should hold rates steady, according to reporting by The Guardian.
“The Fed and new chair’s credibility is on the line,” one former official said.
Another participant was more specific about their inflation concerns: “I am no longer confident that PCE inflation will return to 2% in the next year or two without the Fed raising interest rates.” That respondent added: “Above all, the upside risks to the inflation outlook have worsened since July: energy prices have not reversed as expected, tariff pass-through continues, and the AI build-out is adding to price pressures.”
A third former official struck a similar note, saying: “Earlier in the year, it appeared that there was some hope that inflation would decline closer to its 2 percent target within a year or two. That now appears less likely.” That respondent added that while some of the effects of tariffs and war-induced shortages may manifest as price-level effects, with temporary inflation consequences, “it’s hard to have much confidence in that. Thus, a more sustained increase in inflation is quite possible.”
The PCE price index, the Fed’s preferred inflation gauge, stood at 3.70% year-over-year as of the article’s date — well above the central bank’s 2% target. Core PCE, which strips out volatile food and energy prices, was 3.34% over the same period.
Of the 32 respondents, 29 endorsed a rate hike; none backed the rate cut that Trump has been pushing for, according to The Guardian. The survey also found that the respondents did not think dramatically high rate increases would be necessary to tackle the inflation challenge, according to the reporting.