US stock futures muted as rate cut bets wane ahead of Jackson Hole
Investing.com -- Beth Hammack, President of the Federal Reserve Bank of Cleveland, recently shared with Bloomberg that she is maintaining an open stance on the future direction of interest rates. This comes in light of the uncertainty surrounding President Donald Trump’s policies and their potential impact on the economy.
In a conversation with Bloomberg News on Wednesday in Columbus (WA:CLC), Ohio, Hammack outlined various potential scenarios that might necessitate a range of responses, from lowering to raising interest rates. She also noted her lack of high confidence in predicting the most likely outcome.
One of the scenarios Hammack mentioned includes a situation where the Federal Reserve may need to decrease rates. This would be the case if the labor market rapidly declines and there is reason to believe that the inflationary effects from tariffs will be temporary.
On the other hand, Hammack also sees a scenario where the Federal Reserve might need to increase rates. This would be necessary if inflation and expectations about future prices substantially rise, while employment remains robust.
Hammack also identified a third potential outcome, where inflation meaningfully rises but employment weakens. This situation would present difficult choices, as it would cause a conflict between the Federal Reserve’s mandates to pursue price stability and maximum employment.
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