In an interview with Beth Hammack published by the Wall Street Journal, the Cleveland Fed president argued there was no urgency for the Fed to adjust interest rates, saying policy could remain unchanged at 3.50–3.75% at least until Spring. Hammack said that timeframe would allow policymakers to better judge whether goods price inflation is truly easing as tariffs work their way through supply chains.
Hammack framed her outlook around patience rather than reaction. Her base case is for rates to stay at current levels “for some period of time”, until there is clearer evidence that “either inflation is coming back down to target or the employment side is weakening more materially.”
She was notably skeptical of last week’s November CPI report, which showed a sharp drop in headline inflation to 2.7% from 3.1%, with a similar decline in core inflation. Hammack said she takes the data “with a grain of salt,” pointing to distortions linked to Autumn’s government shutdown. Her own estimates place inflation closer to 2.9–3.0%.
While describing the current policy rate as roughly neutral, Hammack signaled she would actually prefer a slightly more restrictive stance to apply additional pressure on inflation.
