Cleveland President Beth Hammack said Thursday that policymakers think they need to be patients rather than assessing how tariffs affect inflation and growth.
In her first broadcast interview since taking reins in the central bank district in August 2024, Hammack has now focused on high levels of uncertainty and has not committed to a specific course of action on interest rate policies.
“I think we have to be patient, and I think this is the time to make sure we’re moving in the right direction rather than too fast in the wrong direction,” she told CNBC’s “Squawk Box.” “So I’d rather make sure we’re looking at the data, the hard data…it’s actually really good.”
Hammack’s remarks come at a sensitive time for the Fed, where President Donald Trump’s tariffs remain to assess the impact on both inflation and employment.
Several central bank officials, including Chairman Jerome Powell, say the obligation poses a threat to both sides of the Fed’s “double mission” and poses another challenge regarding how monetary policy can be coordinated. Hammack also expressed concern about how the Fed will balance these priorities.
“It could have both our mission and our conflict, which is the most challenging for monetary policy,” she said. “If there’s higher inflation, then lower jobs, that’s where things really get complicated.”
According to data from CME Group, the market is strongly hoping to resume its reduction rate in June as interest rates will occur between May 6th and 7th, with a total of three to four cuts in June.
“If you’re persuading data by June, you know what method to move at that point, and you’ll see the committee move,” Hammack said.
However, uncertainty about the customs policy and how the Fed will respond has contributed to significant market volatility in recent months, with stocks struggling, Treasury yields rising and the US dollar falling.
Hamac, a former Goldman Sachs executive, said she is sensitive to market movements, but only about how it affects the broader economic situation.
“Our job is not to focus on what the market is doing. Our job is to focus on how it affects homes and businesses, and what it actually means in the economy,” she said. “So we’re not piloting the market. We’re piloting the real economy.”
Hammack said “hard” economic data such as unemployment and inflation remained relatively good, while “soft” data such as surveys indicate a high level of concern.
“What we’re hearing now is that uncertainty is actually heavy on businesses,” she said. “It’s causing problems for them in terms of planning, thinking where they’re going, so some people will ease whether they’re investing in new facilities, new capital plans, and whether they’re thinking about employment plans or not.”
“I wish there was a crystal ball. We don’t have one,” Hammack added.
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