'Leap of faith' inflation rate will improve in next couple of quarters: Former Dallas Fed president

Group 1 - The decision by the Federal Reserve is described as agonizing, with significant uncertainty surrounding the labor market and persistent inflation above target levels [1][2][3] - The current Fed funds rate is between 3.75% and 4%, with discussions around the neutral rate being close to this range, indicating higher stakes for upcoming decisions [5][6] - There is a belief that the real neutral Fed funds rate, adjusted for inflation, is likely between 0.75% and 1%, with inflation currently running at 2.75% to 3% [7][8] Group 2 - The ongoing government shutdown has negatively impacted growth, contributing to the complexity of the Fed's decision-making process [4][12] - There is a split in opinions among Fed members, with some advocating for a rate cut due to growth concerns, while others emphasize the need to remain cautious given inflation levels [11][12] - The labor market is experiencing structural issues, with many job openings not being filled, complicating the assessment of economic conditions [13]