Beth Hammack, President of the Federal Reserve Cleveland, said on Friday that she would hesitate to reduce interest rates as long as inflation remains a threat.
In a CNBC interview, the political decision -maker did not share the enthusiasm of the market for a cut that was triggered earlier in the morning after the chairman Jerome Powell’s Keynote speech found that the current conditions “could justify the guideline”.
“I heard that I heard that the chair is open to what will be the right attitude of politics and what the right decision will be in September,” said Hammack. “We were over ours [inflation] Aim for four years and we have to control that. For me, we have to maintain a minor restrictive attitude of politics in order to bring inflation back to the goal. “
Hammack admitted that their idea of the “neutral” interest rate that neither strengthens nor restricts activity is higher than most other Fed officials. The former Goldman Sachs Executive is not a voter in the Rate Setting Federal Open Market Committee this year, but will be in 2026.
“So I don’t really think we have to go so far. So I would like to make sure that we maintain this restrictive attitude of politics in order to bring inflation back to the goal,” she said. “I don’t want to take us to a place where we are accommodating, because I am worried that we could revive the inflation pressure again.”
The FED has kept its benchmark fund interest rate in one area between 4.25% and 4.5% since December 2024. After Powell’s speech, Futures dealers cost almost 90%to reduce the CME group, according to the Fedwatch-Gauge, that the FOMC will be reduced in September.
In a separate CNBC interview on Thursday, the President of Kansas City, Jeffrey Schmid, also expressed skepticism about cutting. Schmid is a FOMC voter this year, but will not be again in 2028.
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