Esther George

So that's what's at stake, I think, as we look at how this unfolds is how will the decision-making process of this institution play out and really take a more long-term focus as opposed to shorter-term interest.

And Esther, how much of a distraction is this for Fed officials?

Again, we do have a closely watched Fed decision next month, given the back and forth with President Donald Trump.

Yeah, so there is a lot of noise going on, and I think it's most unfortunate because there is already enough uncertainty that's coming at the decision they have to make relative to the performance of the economy.

This is a time as the economy is showing shifts, whether it's from policy, whether it's from cyclical factors, that you really want the committee to be able to focus on the debates they will be having at their meeting in September.

And I suspect they are doing their best to spend their time focused on those key issues so that when they come to the table in a few weeks, they can really make those decisions in a manner that serves the public, serves the economy longer term.

And with that in mind, how does cutting interest rates next month, again, the market's pricing at an 85% chance, we have inflation still hotter than people were expecting.

We have a jobs market that is strong and consumer spending showing no signs of slowing down.

So what does that signal if and when we do get a Fed cut next month?

Well, I think that's at the center of the debate.

And we've heard the narrative that has come out of the committee talking about the balance of risk, where they see upside to inflation, where they see downside potentially to the jobs market.

And of course, next week, we will get another piece of what I call the economic puzzle to see how is the job market faring as they come into this meeting.

So the economy looks to be performing pretty good.

The decision is, do they see something ahead that suggests the economy will slow in a way, the job market will be damaged in a way that requires them to ease policy at a time when inflation is holding in there pretty strong?

Well, as a regional Fed president, Scarlett, you know that there were a lot of confirming sources of data.

So, obviously, you do rely on official statistics to guide your understanding of the economy.

But when you serve a regional area, as I did, some seven states, you spend a lot of time talking to those that are working in the economy.

How are they making decisions six months ahead, 12 months ahead, which give you tremendous insights to things like hiring, to things like pricing for their products.

So that is a key component.

It has always been a key component.