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Fed hike or pause?: Where FOMC members stand ahead of June meeting

Ahead of the June FOMC meeting, Fed officials seemingly remain on the fence concerning their interest rate forecast. Yahoo Finance Fed reporter Jennifer Schonberger highlights which Federal Reserve representatives favor another rate hike and those leaning towards a temporary pause.

Video transcript

AKIKO FUJITA: Well, with just one week to go until the June FOMC meeting, the Fed watch were showing a 69% chance for a pause. But where do the committee members currently stand? For a breakdown on that, let's bring in Yahoo Finance's Jen Schonberger. Jen, feels like the momentum has really swung in the expectation of a rate hike here. What are we looking at?

JENNIFER SCHONBERGER: Hey there, Akiko. When the Federal Reserve sits down to decide whether to raise interest rates again next week, it will likely be a game time decision.

Fed Chair Jay Powell has said that interest rate decisions will be made on a meeting by meeting basis, with a key data point the consumer price index for May due out next Tuesday, The first day of the Fed's policy meeting. Officials will need to decide whether the 10 interest rate hikes done so far will be enough in time to cool inflation or whether more action is needed now.

Coming into this June meeting, officials were divided ahead of the blackout period that started on Saturday. In that pause camp, if you will, Fed governor Phillip Jefferson and Philadelphia Fed President Patrick Harker suggested last week that the Fed could pause rate hikes at this next meeting, though both noted that such a decision wouldn't necessarily mean that the Fed is actually done hiking rates.

Parker, for his part, reserved his decision based on data he had not yet seen at the time, namely the May jobs report, which clocked in stronger than expected and the upcoming CPI number. Also in that pause camp, Boston Fed President Susan Collins and Atlanta Fed President Raphael Bostic.

Now, on the flip side, a handful of members still see the need to hike rates. In that camp, St. Louis Fed President James Bullard, who said he thinks the Fed should do two more rate hikes, while Dallas Fed President Lorie Logan has said a pause is not in order, though she said that could change depending on the incoming data.

Also, in that hiking camp, Fed Governor Michelle Bowman, Cleveland Fed President Loretta Mester, and Minneapolis Fed President Neel Kashkari. Back to you.

SEANA SMITH: Jen, some Fed officials, they're not included on those two lists. I'm assuming that means that they're still on the fence. Where do they stand?

JENNIFER SCHONBERGER: Hey, there, Seana. Yeah, there are a consortium of Fed officials who want to keep their options open, don't want to be pinned down heading into that meeting. And part of that group, Fed Chair Jay Powell. Also in that camp, New York Fed President John Williams, Richmond's Tom Barkin, San Francisco's Mary Daly, Chicago Fed President Austan Goolsbee and Fed Governor Chris Waller.

As of this afternoon, as you mentioned, there is the markets are pricing in a 70% chance of a pause next meeting. We know that the Fed typically does not like to surprise markets. Of course, a lot could change depending on that CPI number out next Tuesday. Ladies.

AKIKO FUJITA: It certainly can. Jennifer Schonberger as always, thanks so much for that.