Cleveland Federal Reserve Bank President, Beth Hammack, has cautioned against prematurely lowering interest rates in the United States. In an interview with Handelsblatt, Hammack expressed concern that easing monetary policy too quickly and significantly could be detrimental given the current economic landscape. She highlighted that inflation remains above the Federal Reserve’s target and that the labor market presents potential risks that have yet to fully manifest.
U.S. consumer prices rose 2.9% in August compared to the year prior, exceeding the Federal Reserve’s 2.0% target. Hammack stated that inflation is “too high and moving in the wrong direction” adding that the concern extends beyond goods to encompass the services sector. She also noted emerging signals of weakness within the labor market.
As a member of the Federal Open Market Committee (FOMC), the body responsible for setting U.S. monetary policy, Hammack will hold voting rights in the coming year. Hammack described the committee’s discussions as collaborative and respectful, characterized by a wide range of perspectives. She emphasized that the Federal Reserve’s decisions are based on incoming data and remain independent of political considerations, asserting that political views have no bearing on their deliberations.
