Dallas President Fed Lorie Logan has voiced concerns about inflation and suggested that a more restrictive monetary policy may be necessary. She indicated that, based on the recent economic data and the Fed’s dual-mandate goals, it would have been fitting to raise the federal funds target range FOMC June meeting.

However, Logan pointed out the “challenging and uncertain environment,” arguing that “it can make sense to skip a meeting and move more gradually.”

Logan expressed deep concerns about whether inflation will return to target levels in a timely and sustainable manner. She further noted, “the continuing outlook for above-target inflation and a stronger-than-expected labor market calls for more-restrictive monetary policy.”

On the notion of a delayed impact from past policy actions, Logan expressed skepticism, saying, “I’m skeptical about the potential for large additional effects from this channel.” This stance challenges the widely held view that policy measures often take time to influence the economy, suggesting the need for swift action in addressing the current economic issues.

New York Fed President John Williams voiced his support for the decision to hold rates steady in June, stating yesterday that it was the right move to allow for further data collection and assessment.

“We can take some time and assess and collect more information and then be able to act, knowing that we also communicated through our projections that we don’t think we’re done, based on what we know,” he said.

However, Williams hinted at further rate hikes while he reaffirmed his commitment to be “data dependent” in his decision-making. But he added that recent data “support the idea the Fed may need to raise rates further at some point.”

Williams’ statements were grounded in ongoing concerns about high core inflation, although he acknowledged the progress made in curtailing inflation so far. He highlighted a slowdown in the inflation of non-housing services prices, a key indicator closely watched by Fed officials. “Even in the category of core services excluding shelter, we’re seeing some slowing of inflation,” he added.

In a display of internal discord, Fed’s June 13-14 meeting minutes indicate that while most officials deemed it “appropriate or acceptable” to maintain rates at 5% to 5.25% target range, a few would have backed a quarter-point increase.

“The participants favoring a 25 basis point increase noted that the labor market remained very tight, momentum in economic activity had been stronger than earlier anticipated, and there were few clear signs that inflation was on a path to return to the Committee’s 2 percent objective over time,” the minutes said.

Yet, many officials expressed concerns about an accelerated tightening pace. “Many also noted that, after rapidly tightening the stance of monetary policy last year, the Committee had slowed the pace of tightening and that a further moderation in the pace of policy firming was appropriate in order to provide additional time to observe the effects of cumulative tightening and assess their implications for policy,” read the minutes.

Overall, these June minutes portray a Federal Reserve grappling with the delicate balancing act of controlling inflation while not excessively tightening monetary policy. The diverging views underscore the precarious position the central bank finds itself in as it navigates the complexities of the evolving economic landscape.

Full FOMC minutes here.