Fed’s Hammack says inflation remains too high for a July rate cut, pushing odds below 5% as policymakers urge patience.
According to Beth Hammack, president of the Federal Reserve Bank of Cleveland, inflation is still too high to support a rate drop.
“We’re not there yet on the inflation side of the mandate,” she said in a Fox Business interview that Bloomberg reported.
According To Hammack, More Precise Inflation Data Is Required Before Rate Cuts
According to the Bloomberg story, Hammack stressed the need to evaluate the impact of new measures on inflation before endorsing any easing, and she calls for patience.
Her remarks imply opposition to a rate reduction by the Fed at its next meeting on July 30.
Hammack showed that controlling inflation is still the central bank’s primary goal, notwithstanding market players’ desire for lower rates.
She thinks a premature rate drop by the Fed could undo recent gains in price stability.
The majority of Fed officials share Hammack’s wait-and-see strategy. According to the Bloomberg story, two policymakers have indicated that they might favor a Fed rate cut.
However, the majority are not yet persuaded. Before making a change, many want to assess how tariffs may affect inflation.
Although economic growth is still stable, officials are concentrating on inflation data that continues to improve.
Hammack’s speech emphasizes the necessity for more substantial justifications before approving a rate reduction.
When Interest Rate Cut Odds Fall Below 5%, Markets Price In Delay
The Fed’s upcoming meeting is anticipated to garner much interest.
Investors now believe that a rate cut by the Fed is more likely to occur later in the year.
That would rely on how the data changes, however.
The CME FedWatch Tool confirms that outlook.
The Federal Reserve has a 95.3% likelihood of maintaining the federal funds rate between 4.25% and 4.50% as of July 14.
The market agrees with Hammack’s cautious tone, as only 4.7% of respondents anticipate a rate drop this month.
Fed Governor Christopher Waller hinted at a rate cut in July, according to a CoinGape article. W
aller said the Fed should consider lowering interest rates this month because they are too tight.
Before this, US President Donald Trump also demanded a minimum 300 basis point reduction in interest rates.
The president asserted that the country suffers significant losses due to the Federal Reserve’s delay.
