From CNBC: 2025-04-24 09:52:00

Cleveland Fed President Beth Hammack emphasizes patience in assessing the impact of tariffs on inflation and growth, citing uncertainty. She does not commit to a specific course of action regarding interest rate policy, highlighting the need to move cautiously in the right direction.

Hammack’s remarks come as the Fed evaluates the effects of President Trump’s tariffs on inflation and employment. Officials, including Chair Jerome Powell, express concerns about balancing the dual mandate amidst tariff challenges, creating complexity in monetary policy decisions.

Market expectations anticipate the Fed to hold interest rates in May, with potential rate cuts in June. Hammack suggests data will guide future decisions, highlighting the importance of clarity and evidence in determining the Fed’s course of action.

Uncertainty surrounding tariff policies contributes to market volatility, impacting stocks, Treasury yields, and the U.S. dollar. Hammack stresses the Fed’s focus on broader economic conditions rather than short-term market movements, emphasizing the real economy’s significance.

Hammack acknowledges the economic uncertainty affecting businesses, leading to delays in investments and hiring plans. While economic data remains positive, survey indicators reveal elevated levels of concern among businesses, necessitating a cautious approach in policy decisions.

Read more: Fed’s Hammack calls for patience in assessing what impacts tariffs will have on the economy