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There’s a risk inflation could stick at 3% this year, needs to come down
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Job market stabilized into low hire, low fire landscape
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Both sides of Fed’s mandate have been under pressure
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Expects inflation to ease as year moves forward, but that’s just a forecast
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Is ‘cautiously optimistic’ about economic outlook
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Inflation is ‘still too high’ and tariff issues still in play
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Sees growth boosted by Fed policy, financial conditions and fiscal support
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Rate policy could be on hold ‘for quite some time’
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Current Fed target rate ‘in vicinity’ of neutral
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Fed in good position with policy ‘to see how things play out’
In her latest remarks, Cleveland Fed President Beth Hammack—a notable hawk and 2026 FOMC voter—expressed significant caution regarding the current economic landscape. She emphasized that while she remains “cautiously optimistic,” the risk of inflation sticking at 3% this year is a primary concern that necessitates keeping interest rates on hold for “quite some time.” Hammack described the labor market as having entered a “low hire, low fire” phase, suggesting that both sides of the Fed’s dual mandate are currently under pressure. In her view, the current target rate is likely in the vicinity of neutral, and she believes the Fed is well-positioned to remain patient and observe how economic conditions evolve before making further adjustments.
This still reads as somewhat hawkish from Hammack but it’s actually a step down from her recent rhetoric. She sounds more neutral here than she had previously, though that was at a time when she was fighting against rate cuts (she lost that battle). Now the market isn’t pricing in any moves until June so she and the rest of the FOMC have time to evaluate.
Notably, Hammack is a voter this year so she could be softening her criticism of the Fed and trying to be more of a team player rather than sounding out of step and then being forced to dissent.
This article was written by Adam Button at investinglive.com.