Cleveland Fed Pres. Hammack is adding additional comments saying:
- It is not appropriate to respond to every twist and turn of markets.
- Focuses on how markets impact economy, not focused on asset prices per se.
- It’s going to take time to see how trade policies impact economy.
- ‘Right thing’ might be to stay on hold for now, steady policy is ‘active choice’.
- When things are uncertain better to think about scenarios over forecasts.
- Sustained tariff battles could create more extended pressures.
- Goes into every Fed meeting with an open mind.
- Key for Fed is to keep inflation expectations contained
- Hearing lots of uncertainties from businesses about the economy
- Trade policies up to elected officials, feds navigate impact of those policies.
Earlier today:
Hammack said there is a “strong case” for the Federal Reserve to hold policy steady for now, emphasizing the importance of patience as the central bank gathers more data. She noted that the Fed is in a position to take its time and assess economic conditions, arguing that moving slowly and responding appropriately is preferable to acting too quickly. Hammack stated that if the labor market remains firm and inflation picks up, a more restrictive policy path may be necessary. Conversely, if growth weakens and inflation declines, the Fed could pivot to rate cuts more rapidly. She also acknowledged that it will take time to fully understand the economic impact of new tariffs and reiterated that there is still more work to be done to bring inflation back to the 2% target.
Hammack’s comments align with her consistently hawkish stance, even as others like Waller have turned more dovish. The broader outlook for Fed policy remains uncertain, particularly as Chair Powell’s stance is still unclear. However, Powell will have his chance when he speaks on the economy at 1:30 PM ET.
Hammack is a voting member in 2026.
This article was written by Greg Michalowski at www.forexlive.com.