Federal Reserve officials: Interest rates should remain unchanged until spring! Hamak's stance against inflation is firm.

Despite the Federal Reserve's consecutive interest rate cuts in the past three meetings, Beth Hammack, president of the Cleveland Fed, believes there is no need to adjust interest rates again in the coming months. She emphasized that inflationary pressures remain the primary challenge at present, and the Federal Reserve should pause its actions and wait for clearer data guidance. These remarks were made during an interview and podcast with The Wall Street Journal, indicating her hawkish stance on monetary policy.

No rush to adjust! Hamak expects no change in the interest rate before spring.

Harmack stated that the current Federal Reserve (FED) benchmark Interest Rate is between 3.5% and 3.75%, and she believes this range is appropriate given the current economic conditions. She candidly mentioned that there is no need to adjust the Interest Rate at least until spring, when it will be clearer to observe whether inflation shows a sustained downward trend, especially after the Trump administration's tariff policy is gradually digested into the supply chain.

Focusing on inflation risks, not worried about the labor market slowing down.

In recent months, the Federal Reserve (FED) has cumulatively cut interest rates by 75 basis points in order to address the potential risks of a weakening job market. However, Harmack does not support this pace of rate cuts. She admits that her concerns about high inflation far outweigh her worries about a slowdown in the labor market. She emphasizes that if the goal is to achieve price stability, monetary policy cannot be loosened too early.

November CPI data may be distorted: actual inflation may be underestimated.

Regarding inflation data, Harmack has a cautious stance on the November U.S. Consumer Price Index (CPI) report. The CPI year-on-year growth rate for that month is 2.7%, but she believes this data may underestimate the actual price increase. She pointed out that the data could be influenced by statistical distortions or short-term anomalies, which cannot accurately reflect the current inflation situation.

Prefer a “tighter” policy stance, monetary policy should not shift too quickly.

Harmak reiterated earlier this month at an event in Cincinnati that she is inclined to adopt a more restrictive monetary policy to further pressure inflation. She noted that the current policy interest rate is roughly in the “neutral range,” but she prefers to keep the policy slightly tight to ensure that the long-term goal of price stability can be achieved.

It is worth noting that Hamak will serve as a voting member of the Federal Open Market Committee (FOMC) next year. The FOMC is the most powerful decision-making body within the Federal Reserve (FED), responsible for adjusting key policy tools such as the federal funds interest rate. This means that Hamak's hawkish stance will have a substantial impact on the future direction of interest rate policy.

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