Cleveland Fed President Beth Hammack reinforced the case for a prolonged pause in rate cuts, emphasizing that it will likely be “appropriate to hold the funds rate steady for some time.”
She highlighted the need for a patient approach, allowing Fed to assess the labor market, inflation trends, and overall economic performance under the current policy stance.
Hammack noted that inflation risks remain “skewed to the upside,” with possibility of delaying the return to 2% target. The “recent history” of elevated inflation adds complexity to the outlook, raising concerns about entrenched pricing pressures.
She also pointed to “considerable uncertainty” surrounding government policies, particularly with regard to the “ultimate effects” of recent tariff measures.
