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Cleveland Fed’s Hammack Pushes Back on Further Rate Cuts, Citing Persistent Inflation

A government data blackout from the shutdown complicates the path to the December decision.

Overview

  • Beth Hammack said policy should lean against still‑high inflation and described the current stance as only barely restrictive.
  • She opposed last week’s quarter‑point cut that lowered the federal funds rate to a 3.75%–4.00% range.
  • Hammack prefers keeping rates on the restrictive side of neutral and said raising rates is not her base case for now.
  • She could back increases if inflation fails to cool or if labor proves stronger than recent readings, while a sharper jobs slowdown could justify more easing.
  • Hammack projected inflation near 3% by year‑end and elevated through 2026, as markets price a December cut that Chair Jerome Powell has said is not assured.