On May 3, the WSJ reported that discussions within the Federal Reserve regarding the path of interest rates are undergoing a significant shift. After months of expectations for rate cuts, officials have begun to discuss 'under what conditions a rate hike would be necessary.' The report states that during the latest policy meeting, three regional Fed presidents publicly opposed maintaining the language that 'the next step is more likely a rate cut.' Dallas Fed President Lorie Logan indicated that future rate adjustments 'could be either a hike or a cut.' Outgoing Fed Chair Jerome Powell also acknowledged that the Fed is gradually shifting from a 'dovish' stance to a 'neutral position,' stating that if a rate hike is needed in the future, the Fed would first move to a neutral guidance before leaning towards rate increases. The report notes that persistently high energy prices, the crisis in the Strait of Hormuz, and escalating tensions in the Middle East are re-elevating inflation risks in the U.S., which is also weakening market expectations for rate cuts this year.