Speaking at the New York Association of Business Economic luncheon, the member of the Federal Reserve Board of Governors Lael Brainard warned that recent inflation numbers are weaker than expected and there is a little sign of wage inflation heating up. Her comments didn’t derail expectations of the next hike to be in June as she said that the next hike is likely appropriate soon. However, she warned that the outlook might change if inflation slows down further: ““If the soft inflation data persist, that would be concerning and, ultimately, could lead me to reassess the appropriate path of policy”. As of now, her baseline expectation is that a rate hike is appropriate soon and the Fed needs to start shrinking its balance sheet.

Fed Governor Brainard has been one of the dovish policymakers at the FOMC board. However, since she didn’t make adjustments to her baseline expectations yet, it has little impact in our dashboard, which was first introduced this year and correctly predicted the March rate hike including the dissent from Mr. Kashkari. The Board as of now looks like below,

Doves: Neel Kashkari, and Charles Evans

Hawks: Patrick Harker, William Dudley, and Robert Kaplan, and Lael Brainard

Unknown: Stanley Fischer, and Janet Yellen

Pls. note that Daniel Tarrullo has resigned and the position is yet to be filled.