Cleveland Fed’s Hammack casts doubt on interest rate cuts amid inflation worries
Cleveland Federal Reserve President Beth Hammack said he would hesitate to reduce interest rates as long as inflation continues to be a threat.
In a CNBC interview, the policy -making market did not share the enthusiasm of a cutting market, President Jerome Powell’s opening speech in the early hours of the morning, the current conditions can “guarantee” policy alleviating.
“I heard that he was clear about what the right stance of the chair would be and what the right decision would be in September,” Hammack said. He said. “We were above us [inflation] For four years, we have to take the target and control it. Therefore, in my opinion, we need to maintain a modestly restrictive policy stance to bring inflation back to the target. “
Hammack acknowledged that the idea of ”neutral” interest rate, which does not increase the activity or restricted it, was higher than most other -fed officials. Former Goldman Sachs manager will be in 2026, not voters at the Federal Open Market Committee, which sets the price this year.
“So I don’t think we really have so far, so I want to make sure we maintain the stance of this restrictive policy to bring inflation back to the target.” He said. “I do not want to carry us to a place where we adapt, because if we are compatible, I am concerned that we can revive inflationist pressures.”
Following the CME Group’s speech, the Fed kept the FED fund rate in a range of 4.25-4.5% since December 2024. Future traders, according to the CME Group, FOMC’s chances of cutting in September was priced by about 90%. Fedwatch indicator.
In a separate CNBC interview on Thursday, Kansas City Fed President Jeffrey Schmid also expressed skepticism about cutting. Schmid is a FOMC voter this year, but it won’t happen until 2028.
