This week, Cleveland Federal Reserve President Beth Hammack suggested that the Fed may slow or pause its plans to cut interest rates because inflation is still too high. In a recent report from Reuters, she said that current interest rates are only “barely restrictive,” meaning they may not be high enough to keep inflation moving toward the Fed’s two percent goal.
Hammack warned that lowering rates too quickly could undo the progress made so far. Her comments go against what many in the financial markets were expecting, since some investors thought the Fed might cut rates again soon, possibly in December. Her message suggests the Fed wants to be more careful and avoid making inflation rise again.
If the Fed decides to wait before cutting rates further, borrowing costs like mortgage rates, car loans, and credit-card interest may stay high for a bit longer. Inflation is still a major concern, and the Fed wants to make sure prices continue to cool down before taking big steps.
Hammack’s comments do not guarantee that the Fed will pause rate cuts, but they show that future decisions will depend on stronger proof that inflation is easing. For now, the path toward lower interest rates remains uncertain.
Fed's Hammack leans against more rate cuts because of high inflation
