Fed's Hammack Aims to Curb Inflation Without Job Market Harm
Cleveland Fed President Beth Hammack says policymakers hope to slow demand and tame inflation while preserving labor market strength.
Federal Reserve Bank of Cleveland President Beth Hammack expressed hope Tuesday that monetary policymakers can bring inflation back to target by cooling consumer demand without triggering widespread job losses, signaling continued confidence in the Fed's ability to engineer a so-called soft landing.
Hammack's remarks reflect the central bank's ongoing balancing act as officials weigh the need to keep borrowing costs restrictive long enough to suppress price pressures against the risk that prolonged tightening could erode employment gains built up since the pandemic era.
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The comments come as Fed officials broadly maintain that interest rates should remain at current levels until there is clearer evidence that inflation is sustainably moving toward the 2% target. Hammack's tone suggests she and her colleagues remain cautious about cutting rates prematurely, even as some corners of the economy show signs of slowing.
Labor market resilience has been a key factor allowing the Fed to hold rates higher for longer without sparking a recession, a dynamic policymakers view as a narrow but navigable path. Any meaningful deterioration in employment conditions could shift the calculus inside the Federal Open Market Committee toward earlier or deeper rate reductions.
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