The president of the Federal Reserve Bank of Cleveland, Beth Hammack, made it clear that current economic data does not justify a reduction in interest rates, which diminishes hopes for a cut in the short term.
In statements made in Wyoming before the annual Federal Reserve symposium in Jackson Hole, Hammack told Yahoo News that inflation remains too high and continues to rise. "If the meeting were tomorrow, I wouldn’t see reasons to cut rates," she said. She also noted that the effects of the new tariffs are just beginning to show in inflation figures, and it is unlikely that the full impact will be felt until next year.
His stance indicates continued support for the cautious approach of Fed Chairman Jerome Powell regarding monetary policy, despite opposition from some policymakers favoring easing and ongoing pressure from President Trump to lower borrowing costs. In the last Fed meeting, two members dissented in favor of lower rates, and in recent days, potential successors to Powell have publicly advocated for drastic cuts. Former St. Louis Fed President Jim Bullard, for example, argued that rates should be one percentage point lower than the current levels.
The markets, which just a week ago were almost certain of a rate cut in September, have reduced their expectations. According to CME FedWatch, the probability has decreased to around 71%. The $BTC , which reached a record of over $124,000 last week due to optimism about rate cuts, has since fallen nearly 10%, settling at around $112,800 following Hammack's statements.
Investors will hear directly from Powell on Friday during his keynote speech in Jackson Hole. He is expected to hold firm, emphasizing that inflation remains uncomfortably high and that the Fed is not yet ready to adopt an expansive monetary policy.
