E-Paper
Fed’s Hammack says rates could be on hold for ‘quite some time’
Cleveland Fed President Beth Hammack suggested interest rates may remain on hold as officials evaluate economic data
Federal Reserve Bank of Cleveland President Beth Hammack said interest rates could be on an extended hold while officials evaluate incoming economic data.
“Rather than trying to fine tune the funds rate, I’d prefer to err on the side of patience as we assess the impact of recent rate reductions and monitor how the economy performs,” Hammack said Tuesday in remarks prepared for an event in Columbus, Ohio. “Based on my forecast, we could be on hold for quite some time.”
The Cleveland Fed chief has repeatedly urged her peers on the Federal Open Market Committee to be cautious with rate cuts to avoid stoking higher inflation. She supported last month’s decision to hold interest rates steady after three consecutive reductions at the end of 2025.
Hammack shared a “cautiously optimistic” outlook, saying economic growth should get a boost from fiscal support, lower interest rates and other factors — a shift that should bolster the labor market. She said she expects inflation to ease this year.
Fed officials have been comforted by softer inflation readings and data suggesting some stabilization in the unemployment rate, but fresh information expected this week could test those assessments. January jobs data, which was delayed by the most recent government shutdown, will be released Wednesday, and the next consumer price index report is scheduled for Friday.
Retail sales were weaker than expected in December, with eight out of 13 categories posting decreases, according to data released earlier Tuesday by the Commerce Department.
Hammack emphasized that officials need to be flexible with their response should the economy not behave as expected, and she expressed openness to raising interest rates if needed.
“Right now, I see the risks of a higher or lower path for the funds rate as about balanced,” she said. “History shows us flexibility has benefits.”
More stories like this are available on bloomberg.com
©2026 Bloomberg L.P.
