Fed's Hammack: The market view of one cut between now and late January is reasonable

Federal Reserve (Fed) Bank of Cleveland President Beth Hammack noted that while she believes it may be time for the Fed to begin slowing the pace of rate cuts, the Cleveland Fed head gave a nod to investors who are anticipating at least one more rate cut between now and the end of January. Hammack made her first major policy speech appearance on Friday after taking over the position of President of the Cleveland Fed from Loretta Mester, who retired from the post in June 2024 following a ten year run in the position.

Key highlights

The market view of one cut between now and late January is reasonable.

I have an open mind about the December FOMC meeting, more data is incoming.

The economic landscape calls for modestly restrictive monetary policy.

Fed at or near time to slow pace of rate cuts.

Monetary policy is likely somewhat restrictive.

Slowing pace of rate cuts allows the Fed time to sound the economy.

Data will drive what Fed does with monetary policy.

I expect solid growth, low unemployment, and gradual inflation ebbing.

The economy is strong, labor market is healthy.

The Fed has more work to do to cool inflation.

Labor market has become better balanced.

It is too soon to say what impact the proposed tariffs would have.

The US debt seems to be on an unsustainable path of growth.

Setting monetary policy is independent of the national debt.

The US economy is strong, and the labor market is pretty healthy.

Consumers are really supporting the economy, household balance sheets are solid.

Housing inflation is going to take a lot longer to come down.

I am very focused on housing and real estate issues.