Cleveland Federal Reserve President Beth Hammack said Friday he was hesitant to refrain from lowering interest rates as long as inflation remains a threat.
In an interview with CNBC, policymakers did not share market enthusiasm for the cut after giving a keynote address by Chairman Jerome Powell in the morning, saying current conditions could “justify” policy mitigation.
“I heard Chair is open to what the right attitude will be in policy and what the right decision will be in September,” Hammack said. “We were on top of us [inflation] You’ve been targeting targets for four years and you need to control them. So for me, we need to maintain a modestly restricted policy stance to bring inflation back to targeting. ”
Hammack admitted that her views on “neutral” interest rates that neither boost nor limit activity were higher than most other Fed officials. The former Goldman Sachs executive is not a voter on the Federal Open Market Committee this year, but it will be 2026.
“So we don’t think we should go that far, so we want to make sure we’re maintaining that restrictive policy to bring inflation back to target,” she said. “If we are accommodation, we don’t want to move us to where we are staying because we are worried that we can revitalize the accommodation.”
The Fed maintains its benchmark funding rate at a price that FOMC will be cut in September, following Powell’s speech, according to CME Group’s FedWatch Gauge.
In another CNBC interview on Thursday, Kansas City Fed President Jeffrey Schmidt also expressed skepticism about the amputation. Schmid is a FOMC voter this year, but will not be held again until 2028.
