Financial Association News on August 22 (Editor: Niu Zhanlin) On Thursday local time, Cleveland Federal Reserve President Beth Harmark stated that if Federal Reserve officials were to make a policy decision tomorrow, she would not support a rate cut in September.
On that day, Harmark stated in a media interview: 'The current level of inflation is still too high and has been on an upward trend over the past year. Based on the information I have, if a monetary policy meeting were held tomorrow, I see no reason to lower interest rates.'
She acknowledged some concerns in the labor market but pointed out that the unemployment rate is still close to what she considers to be 'full employment' levels.
Harmark claimed: 'After comprehensive consideration, I believe it is crucial to maintain a moderately restrictive policy stance, as only in this way can we continue to push inflation back to the target range.'
She added that there are no obvious signs of an economic recession, and therefore no reason to adopt stimulus policies.
Regarding the impact of tariffs, Harmark believes that their effect on the economy has just begun to emerge. It is uncertain whether the tariffs are a one-time shock or a more lasting impact, but the full effects will not be clear until next year.
Harmark's statement comes as global central bank officials gather at Grand Teton National Park for the Jackson Hole symposium. Federal Reserve Chairman Powell is set to deliver a highly anticipated speech on Friday, and investors will closely watch for any hints about the September monetary policy meeting.
The minutes from the Federal Reserve's July meeting released on Wednesday showed that officials believe the current economic situation may lead to 'difficult policy trade-offs'. Meanwhile, Trump and his allies continue to pressure the Federal Reserve to cut rates immediately.
Harmark also clearly pointed out that both aspects of the Federal Reserve's dual mandate are under pressure: the labor market is slowing, while inflation remains above target, and the Trump administration's increased tariffs on imports may further drive up prices.
Earlier on Thursday, Atlanta Federal Reserve President Bostic stated that he still believes the Federal Reserve could cut rates once this year, but also pointed out that this judgment carries significant uncertainty in the context of profound changes in the economy.
Bostic believes that the current target range for the federal funds rate (4.25%–4.5%) is 'slightly restrictive'. There is intense debate within the Federal Reserve about whether a rate cut is necessary. He expects U.S. economic growth to be 'relatively moderate' this year, and the economy is expected to rebound once the business community has a clearer understanding of the direction of U.S. economic policy next year.
