Fed’s Hammack: No case for rate cuts as inflation trends wrong way

Cleveland Fed President Beth Hammack signaled little appetite for near-term easing, telling Yahoo Finance that if the FOMC were meeting tomorrow she “would not see a case for reducing interest rates.” She stressed that inflation has been “too high for the past four years” and it’s been “trending in the wrong direction” currently, justifying a stance that remains “modestly restrictive.”

Hammack noted that the economy has so far shown resilience, with no significant signs of downturn that would warrant easier policy. Instead, she emphasized the Fed’s responsibility to ensure inflation expectations remain anchored, cautioning that premature cuts risk undermining that effort.

On tariffs, Hammack flagged that their effects are only beginning to filter through. Typically, it takes “three to four months” for the first signs to emerge, meaning the bulk of the impact will not be seen until 2026. She expects further pass-through of higher costs next year, adding another reason to proceed cautiously on easing.