Fed’s Hammack Raises Inflation Concerns Amid Push For Interest Rate Cut

Federal Reserve Bank of Cleveland President Beth Hammack has said inflation is still too high to justify a Fed rate cut. In an interview with Fox Business which was shared by Bloomberg, she stated, “We’re not there yet on the inflation side of the mandate.”

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Clearer Inflation Progress Needed Before Rate Cuts, says Hammack

Based on the Bloomberg report, Hammack wants patience as she emphasized the need to assess how new policies are impacting inflation before supporting any easing. Her comments suggest resistance to a Fed rate cut at the upcoming July 30 meeting.

While market participants are eager for lower rates, Hammack made it clear that inflation control remains the central bank’s top priority. She believes acting too soon with a Fed rate cut could reverse recent progress on price stability.

Hammack’s wait-and-see approach aligns with the majority of Fed officials. According to the Bloomberg report, two policymakers have hinted they might support a Fed rate cut. But most are not yet convinced. Many want to evaluate the inflationary effects of tariffs before changing course.

Economic growth remains steady, but policymakers are focused on sustained improvement in inflation data. Hammack’s message reflects the need for more convincing evidence before endorsing a rate cut.

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Markets Price In Delay as Interest Rate Cut Odds Drop Below 5%

The Fed’s next meeting is expected to draw significant attention. Investors now see a Fed rate cut as more likely in the later part of the year. However, that would depend on how the data evolves. That outlook is confirmed by the CME FedWatch Tool.

As of July 14, there is a 95.3% chance the Federal Reserve will hold the federal funds rate at 4.25% to 4.50%. Only 4.7% expect a rate cut this month, showing clear market alignment with Hammack’s cautious tone.

According to a CoinGape report, Fed Governor Christopher Waller raised the possibility of a July Fed rate cut. Waller stated that the Fed is too tight and should consider a rate cut this month.

Earlier, US President Donald Trump also called for an interest rate cut of at least 300 basis points. The president claimed that the Federal Reserve’s delay is costing the nation huge losses.

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