Group 1 - The Federal Reserve is experiencing significant internal divisions regarding its monetary policy path, influenced by President Trump's ongoing pressure and uncertainties in trade and immigration policies [1][2] - The Fed recently initiated its first rate cut of the year, lowering the federal funds rate target range by 25 basis points to 4.0%–4.25%, with support from most policymakers [1][6] - San Francisco Fed President Mary Daly supports the rate cut, citing signs of economic slowdown, consumer spending, and labor market weakening, emphasizing the need for further policy adjustments to stabilize prices and support the labor market [1][6] Group 2 - Chicago Fed President Austan Goolsbee expressed a cautious stance, supporting the recent rate cut but warning against hasty further cuts, noting persistent inflation above the 2% target for four and a half years [1][2] - Treasury Secretary Scott Bessent criticized Fed Chair Powell for not signaling further rate cuts, suggesting a need for a reduction of 100 to 150 basis points by year-end [2] - New Fed Governor Stephen Miran, nominated by Trump, advocated for a more aggressive 50 basis point cut, indicating a shift in the Fed's approach to monetary policy [2][3] Group 3 - Miran's policy stance has garnered attention, proposing that the Trump administration's policies should lead to a significant decrease in the neutral real interest rate, advocating for a further rate cut to around 2.5% [3] - Concerns were raised regarding the assumptions underlying Miran's proposals, including potential labor shortages and inflationary pressures from immigration restrictions and tariffs [3] - The Atlanta Fed's GDPNow model predicts a strong economic growth rate exceeding 3% by Q3 2025, suggesting reduced urgency for significant rate cuts [3][4] Group 4 - A joint survey by the Atlanta Fed, Richmond Fed, and Duke University indicates that while trade policy uncertainty has decreased, expectations for costs and prices are rising for 2026 [4] - The survey revealed that tariffs have increased planned price hikes by up to 30%, continuing to suppress some investment decisions among businesses [5] - Powell noted that short-term inflation risks are skewed upward while employment risks are skewed downward, highlighting the complex interplay of inflation, employment, and political pressures facing the Fed [5][6]