Cleveland Fed president "Not certain about additional rate cuts…2~3 years needed for inflation to stabilize"

JH Kim

Summary

Beth Hammack, Cleveland Fed president, took a cautious stance on the possibility of additional rate cuts.
Hammack said inflation will take 2~3 years to reach the 2% target.
The remarks were interpreted as a signal that they lower the Fed's expectations for policy easing.

Beth Hammack, president of the Federal Reserve Bank of Cleveland, expressed a cautious stance on the possibility of further rate cuts due to persistent inflation.

According to Reuters on the 6th (local time), Hammack said, "Given the current level of inflation, it is difficult to say that there is a clear need to lower interest rates further." She forecasted, "Prices remain at elevated levels, and it will take 2% to return to the target, which will take 2~3 years."

She also added, "Although some recent indicators show signs of easing, inflationary pressures still exist," and "policy direction will be determined by future economic data."

With divided views within the Fed over the pace of rate cuts, the remarks are interpreted as a signal that they lower expectations for further easing.