Fed's Hammack does not see need for immediate interest rate cuts, advocates cautious approach

From Yahoo Finance: 2025-06-24 09:18:00

Federal Reserve Bank of Cleveland President Beth Hammack does not see an immediate need to cut interest rates due to uncertainty surrounding trade tariffs and inflation. Despite some Fed officials open to rate cuts in July, Hammack believes maintaining current policy is appropriate given the economy’s resilience. She emphasizes the importance of seeking additional information before making any changes.

Hammack acknowledges the Fed’s goal of returning policy to a neutral setting with very modest cuts, but stresses the need for caution in uncertain times. The recent decision by the FOMC to hold interest rates steady reflects a wait-and-see approach amid concerns over how President Trump’s trade policies may impact inflation. Hammack remains attentive to the possibility of rate cuts but advocates for a slow and deliberate approach.

While some Fed officials are open to rate cuts, Hammack emphasizes the importance of moving in the right direction rather than hastily. With inflation still below the 2% target, the impact of tariffs on inflation remains uncertain. Despite the solid economy and strong job market, Hammack describes current monetary policy as “modestly restrictive.” The Fed continues to monitor economic conditions closely.



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