Five years of high inflation is testing the patience of Federal Reserve officials and exposing a split between those willing to wait before hiking interest rates and those who say time is running out, Bloomberg reported. After the Fed held its benchmark rate steady last month, recent comments suggest a broader minority now see a case for raising rates soon, with some non-voting FOMC members siding with the three dissenters who preferred a modest increase. Others in the majority argue inflation could still cool on its own, though their patience is wearing thin. Friday's surprise decline in July payrolls did little to settle the debate. BNP Paribas chief US economist James Egelhof said the data has been ambiguous about which story is playing out, and that pressure on the Fed to act is increasing.

Attention now turns to inflation data before the September meeting, including a consumer-price report due next week, according to Bloomberg. The CPI stood at 3.5% in June and the Fed's preferred core measure at 3.3%, versus a 2% target officials see reached only by 2028. Dissenters Neel Kashkari, Lorie Logan and Beth Hammack have warned that waiting could require more aggressive tightening later, while Governor Lisa Cook said hiking too soon could hurt the labor market and noted some disinflationary forces are already in play. A notable absence from the debate has been Chair Kevin Warsh, whose reluctance to guide markets has clouded his economic view. Apollo's Torsten Slok said the issue is no longer just the data but also Fed credibility, with inflation above target since 2021. Warsh will take center stage at Jackson Hole later this month.