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Investing.com -- Cleveland Federal Reserve President Beth Hammack expressed concerns about inflation during an interview with Yahoo Finance on Thursday, suggesting that current economic conditions may not support an interest rate cut in September.
Hammack emphasized that both sides of the Fed’s dual mandate - price stability and maximum employment - are under pressure. She stated that maintaining a "modestly restrictive" monetary policy remains important as inflation remains "too high" and is "trending up."
"We’re missing on inflation, need to stay laser-focused," Hammack said during the interview. She added that with the current economic data, she "wouldn’t see case for September cut."
The Fed official noted that wholesale costs are increasing but not necessarily being passed on to consumers yet. She also discussed the impact of tariffs, saying, "It’s just now that we’re starting to see tariff impact" and warned that the "full tariff effect" won’t be visible until next year.
Hammack expressed concern that traditional economic theory regarding one-time tariff impacts may not hold in the current environment.
Regarding the labor market, Hammack observed that while labor demand may be decreasing, labor supply is also declining. She suggested the labor market "could still be in balance despite slowing" and affirmed that the "unemployment rate is one of best indicators we have."
Looking ahead to future monetary policy, Hammack stated that she believes the Fed has a "small distance to go to get to neutral" policy rates.
During the interview, Hammack also expressed support for Fed Governor Lisa Cook, describing her as "a person of high integrity."