Bloomberg Surveillance · Tuesday, September 15, 2026
Dominic Constam discussed the Federal Reserve's approach to inflation, contrasting Chair Powell's view of temporary shocks with Governor Waller's perception of embedded underlying inflation. Constam suggested that Governor Waller's perspective implies a more aggressive and prolonged tightening cycle, potentially involving multiple rate hikes, to combat inflation effectively.
“Well, basically, it appears Walsh has sort of shifted the Fed's gears in the terms of how they're looking at inflation and highlighting the view that underlying inflation is higher than they. Want it to be.”
“And prior to Walsh, Powell would have had a view that underlying inflation was actually relatively low and was just dealing with a lot of shocks that are going through the system. So, Walsh has a different view on inflation, it would appear, from Jackson Hole.”
“But the trouble with patience is if it goes on sort of too long and you keep waiting, waiting, then basically those shocks get embedded into the trend is kind of the issue. And I think Walsh is sort of highlighting that he feels that sort of has happened already.”