Cleveland Fed’s Hammack opposed rate cut, citing inflation risks

Investing.com -- Cleveland Federal Reserve President Beth Hammack revealed Friday she disagreed with the central bank’s decision to cut interest rates this week, expressing concerns about ongoing inflation risks.

"I would have preferred to have held rates steady at this meeting," Hammack said during a conference in Dallas, where she appeared on a panel with Atlanta Fed President Raphael Bostic. "I do think we need to maintain some amount of restriction to help get inflation back down to target."

Hammack’s comments aligned with statements from two other Fed officials earlier Friday who also opposed Wednesday’s Federal Open Market Committee (FOMC) vote to reduce the benchmark rate by a quarter percentage point.

The Cleveland Fed president, who does not hold a voting position on the FOMC this year but will rotate into voting ranks in 2026, stated that the Fed’s policy is "barely restrictive, if at all" following the cut. She believes the reduction brings the benchmark rate to "right around" her estimate of the neutral rate - a level that neither stimulates nor restrains economic activity.

Hammack noted that inflation pressures are "broader than tariffs" with "core services strong," and mentioned the presence of a "K-shaped, two-speed economy." She also expressed a desire to remain "open-minded to signs of labor softness."

In contrast, Bostic said he "eventually got behind" the rate cut decision because he believes monetary policy remains "in restrictive territory" even after the reduction.

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