Cleveland Federal Reserve President Beth Hammack on Thursday gave indications that she thinks the central bank could be nearing the end of what could be a brief rate-cutting cycle.
The policymaker told CNBC that she thinks the current level of interest rates is “barely restrictive, if at all” when it comes to the economic impact.
Restrictiveness is a key metric for Fed officials, who are divided ideologically over whether labor market weakness or inflation is a bigger threat. Hammack has been more in the hawkish camp when it comes to inflation, preferring higher rates and more restrictive policy as a bulwark against another surge in prices.
“I think that we need to maintain a modestly, somewhat restrictive stance of policy to make sure that we are continuing to bring inflation back down to our 2% objective,” she told CNBC’s Steve Liesman on “Squawk on the Street.” “Right now, to me, monetary policy is barely restrictive, if at all, and I think we need to make sure that we’re maintaining that somewhat restrictive stance to bring monetary to bring in place.”
Hammack added that she thinks the current federal funds rate, targeted in a range between 3.75%-4%, is “right around a neutral rate,” indicating it does not need to come down much further.
