Cleveland Fed President Beth Hammack recently spoke out about the need for patience when assessing the impact of tariffs on inflation and growth. In her first broadcast interview since assuming her role in August 2024, Hammack emphasized the importance of carefully evaluating the data before making any hasty decisions regarding interest rate policy.
“We need to be patient and ensure that we are moving in the right direction rather than rushing into any decisions,” Hammack told CNBC’s “Squawk Box.” She highlighted the current high level of uncertainty and the need to make informed decisions based on solid data.
The Fed is currently facing challenges in assessing the effects of President Donald Trump’s tariffs on inflation and employment. Hammack, along with other central bank officials, expressed concerns about how to balance the dual mandate of maintaining stable prices and maximizing employment opportunities.
Market expectations suggest that the Fed will maintain interest rates during its upcoming meeting on May 6-7, with potential rate cuts in June and possibly later in the year. While Hammack does not have a voting role on the Federal Open Market Committee this year, she will have the opportunity to vote on rate-setting decisions in 2026.
The uncertainty surrounding tariff policies and the Fed’s response has contributed to significant market volatility in recent months. Stocks have been struggling, Treasury yields have been rising, and the U.S. dollar has been weakening. Despite these market movements, Hammack emphasized that the Fed’s primary focus is on how these changes impact the broader economy rather than solely on market fluctuations.
Hammack acknowledged the challenges faced by businesses due to the uncertainty surrounding tariffs and its impact on investment and hiring decisions. While “hard” economic data such as unemployment and inflation remains positive, “soft” data such as surveys indicate heightened levels of concern among businesses.
As the Fed continues to navigate these challenges, Hammack emphasized the importance of staying focused on the real economy and ensuring that monetary policy decisions are based on sound data and analysis. While uncertainties remain, Hammack remains optimistic about the resilience of the economy and the potential for positive outcomes in the future.
