Milan’s succession may lead the FOMC to marginally turn dovish; the impact of oil price shocks on employment has a one-year lag — W18 Overseas Macro Brief

Given the Republican seat advantage in the Senate, Walsh's confirmation faces no obstacles. The market expects Powell to remain as governor for several months. The proposal to dismiss Governor Cook has been put on hold, and the possibility of dismissal is extremely low. If Powell leaves office in the future and Milan takes his place as governor, the new FOMC stance may shift marginally dovish.

There is a lag in the impact of oil prices on employment and consumption, as companies need time to adjust hiring and layoff decisions, supply chain transmission, and changes in consumer spending. If medium- and long-term inflation expectations rise significantly, the Federal Reserve would need to raise interest rates under extreme circumstances. If oil prices do not continue to rise and the effects of tariffs fade, the second quarter is most likely to be the peak of U.S. inflation this year.