MNI BRIEF: Fed's Hammack Says Rate Hike Not In Base Case
MNI (WASHINGTON) - Cleveland Fed President Beth Hammack said Tuesday raising interest rates this year is not the most likely outcome and the 100 bps of cuts last year may still be working its way through the economy.
"My base case is that we're going to be on hold for quite some time," she said in Q&A at an University of Kentucky event. "While it's not my base case that we would raise rates this year, there's a lot of uncertainty there about about a broad swath of policies, and so we'll need to be mindful of what all of those are and what those impacts are before making those decisions." (See: MNI INTERVIEW: Fed Likely On Hold For Most Of 2025-Kroszner)
The Cleveland Fed chief said it's unclear how much of the cuts late last year has actually factored into the economy and how much that is playing through now.
"We have to see how the economy is performing, see how businesses are doing, see what overall financial conditions look like, before making an assessment of are we potentially at that neutral rate," she said. "When I look at the strength of where we are now, it feels to me like we may actually be pretty close to that rate."