Fed's Hammack leans against more rate cuts because of high inflation

Core Viewpoint - Ongoing high levels of inflation suggest that the U.S. central bank should not cut interest rates further at this time [1][2]. Group 1: Monetary Policy Stance - The current monetary policy is viewed as barely restrictive, which does not significantly help in reducing inflation pressures above the 2% target [2][3]. - The Federal Reserve's recent decision to cut the benchmark interest rate to the 3.75%-4.00% range was opposed by Cleveland Federal Reserve President Beth Hammack, who believes inflation remains too high [3][5]. Group 2: Inflation and Economic Outlook - Hammack projects inflation to be at 3% by the end of this year, remaining elevated through 2026 before gradually returning to desired levels [5]. - Financial markets are currently supportive of the economy, with accommodative financial conditions due to recent equity price gains and easy credit [6]. Group 3: Labor Market Insights - There are concerns regarding the labor market, with expectations that the unemployment rate will rise slightly above its longer-run value by the end of the year [6]. - Despite the slowing labor market, Hammack does not foresee a significant downturn, although subdued job growth may indicate fragility [6].