Logan and Schmidt are sending strong hawkish signals again, with internal divisions within the Federal Reserve intensifying.

Dallas Fed President Logan sent a strong hawkish signal on Friday, saying she would oppose another rate cut at the December meeting until she sees more "convincing evidence." Logan pointed out that current inflation remains too high and shows signs of picking up, with the decline rate far slower than she expected. In her view, unless the data in the coming weeks show a significant acceleration in inflation or the labor market experiences a "faster cooling beyond the current trend," further rate cuts are inappropriate. Logan emphasized that policy still needs to remain "slightly restrictive" to ensure enough braking effect on the economy. Although she supported a "precautionary rate cut" in September out of concern that the labor market might deteriorate, she now believes that while the labor market is cooling, the process is smooth and resilient, and further "precautionary easing" measures are no longer necessary. In contrast to Logan's hawkish stance, Fed Governor Milan believes that the latest data has provided sufficient reasons for further rate cuts. Milan stated that since the September policy meeting, "all the data we have received points to dovishness," whether it is inflation or employment weakening to a degree that supports further easing. He pointed out that inflation data is lower than expected, core pressures continue to ease, and the labor market is slowing, all of which indicate that the central bank should lean towards continuing rate cuts rather than maintaining a wait-and-see attitude. He stressed that all these data should make us more dovish on the question of whether to continue cutting rates, not the other way around. Kansas City Fed President Schmidt also joined the hawkish camp. He believes that further rate cuts may damage the Fed's credibility in achieving its inflation target. He believes that recent weakness in the labor market is more due to structural factors such as technological changes, immigration policy adjustments, etc., which cannot be solved by rate cuts. He warned that the current economic growth remains resilient and rashly continuing rate cuts may reignite inflationary pressures. Schmidt also emphasized that concerns about inflation in the business sector are no longer limited to tariffs, with multiple areas such as medical costs, insurance premiums, and electricity bills bringing a more widespread pressure. He voted against a rate cut in October, advocating for maintaining stability in interest rates, and reiterated that the current rate level only creates "mild pressure" on the economy, which is appropriate. Schmidt also mentioned that in terms of the balance sheet, he supports ending the shrinking process in December, but believes that in the long run, the Fed's balance sheet size should be kept as small as possible to avoid distorting the market. He suggested that the Fed could reduce the reserve interest rate or adjust the overnight repo mechanism to reduce the demand for reserves by banks and prevent passive expansion of the balance sheet. Recently, several Fed officials have expressed caution. On Thursday, Minneapolis Fed President Neil Kashkari stated that he did not support the Fed's most recent rate cut, but has not yet made a decision on the best course of action for the December policy meeting. Boston Fed President Susan Collins said on Wednesday that rates should be maintained at their current levels for "a period of time" to balance inflation rates (currently at 3%, higher than the Fed's 2% target) and weak hiring in the labor market. She said that still strong growth could slow down or hinder progress in cooling price pressures. Other hawkish officials, including Chicago Fed's Austan Goolsbee and Cleveland Fed's Beth Hammack, have also expressed similar views in recent weeks, warning against another rate cut. Meanwhile, officials advocating for rate cuts, in addition to Milan, also include Fed Governors Stephen Mian, Christopher Waller, and Michelle Bowman.