Cleveland Fed’s Hammack Says Rates to Stay on Hold for ‘Quite Some Time,’ Current Level Appropriate

JOON HYOUNG LEE

Summary

Cleveland Fed President Beth Hammack said the benchmark interest rate is likely to remain unchanged for quite some time and that the current level is appropriate.
She said the Fed has held the benchmark interest rate at 3.5%% to 3.75%% twice this year and is likely to maintain that pause for quite some time.
Hammack said additional supply shocks stemming from the war in Iran could alter monetary-policy judgments if they hit while inflation is already elevated.

Forecast Trend Report by Period

*Beth Hammack, president of the Federal Reserve Bank of Cleveland, speaks during an interview with CNBC on June 15. Photo: CNBC capture*

Beth Hammack, president of the Federal Reserve Bank of Cleveland, said the Federal Reserve is likely to keep interest rates unchanged for "quite some time."

In an interview with CNBC on June 15, Hammack said rates would remain on hold for an extended period. She added that risks to policy run in both directions, with incoming data potentially calling for either a more accommodative stance or tighter policy.

Hammack also said the current benchmark rate is at an appropriate level. The Fed has held the policy rate unchanged twice this year at 3.5% to 3.75%.

She also cited inflation risks tied to the war in Iran. It is difficult, from a monetary-policy perspective, to judge how to respond to repeated supply shocks like these, she said. Such shocks are typically treated as temporary, but that assessment could change if they add to already elevated inflation.

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