Key Points
- Cleveland Fed President Beth Hammack wants to keep interest rates steady until spring.
- She opposed the last three interest rate cuts, which totaled 0.75%.
- Hammack is more worried about high prices (inflation) than people losing their jobs.
- The current benchmark interest rate sits between 3.5% and 3.75%.
Beth Hammack, the president of the Cleveland Federal Reserve, believes the central bank should hit the brakes on its plan to lower interest rates. In a recent interview, she made it clear that she sees no reason to change the current benchmark rate for at least several months. This means Americans shouldn’t expect another rate cut until spring at the earliest.
Hammack’s view stands out because it runs counter to the recent trend at the Fed. Over the past few months, officials have lowered interest rates three consecutive times. In total, they reduced the rate by 0.75 percentage points, bringing it to the current range of 3.5% to 3.75%.
While many other officials believed these cuts were necessary to protect the job market from weakening, Hammack opposed them. She believes the central bank moved too quickly, given that the cost of living remains a major concern.
To her, the danger of inflation—where prices for groceries and gas keep rising—is a bigger threat than the risk of the labor market slowing down. She argued that the employment side of the economy isn’t showing enough real “fragility” to justify making money even cheaper to borrow right now.
Instead of rushing into more changes, she wants the Fed to stay exactly where it is and watch how the economy handles the previous cuts.
Hammack told the Wall Street Journal that her “base case” is to sit tight until there is clear proof that the economy is moving in a specific direction. She wants to see hard evidence that inflation is finally falling toward the Fed’s 2% goal.
On the flip side, she would only support another cut if she saw the job market begin to fail significantly. For now, her message is one of patience.
By keeping rates steady, the Fed can avoid making a mistake that might let inflation roar back. If her cautious stance prevails over other members, the recent streak of falling interest rates will come to an end for now.
