Federal Reserve Bank of Cleveland President Beth Hammack said Friday she voted against the central bank’s rate cut earlier this week because economic strength and the inflation outlook argued against easing policy.
“Based on my estimate that monetary policy is not far from a neutral stance, I prefer to hold policy steady until we see further evidence that inflation is resuming its path to our 2 percent objective,” Hammack said in a statement released Friday as the quiet period around the most Federal Open Market Committee ended.
“Maintaining the target range for the federal funds rate at 4-1/2 to 4-3/4 percent at the December 2024 meeting was the best choice given the strength of recent economic data, accommodative financial conditions, and my forecast that inflation will remain somewhat above 2 percent over the next year amid a healthy labor market,” she said.
On Wednesday, the Fed met expectations and cut its federal funds target range by a quarter percentage point, to between 4.25% and 4.5%. As part of the meeting, the Fed also marked down the number of rate cuts it expects to do next year amid a notable increase in the expected levels of inflation.
Hammack was the only dissenting vote at the meeting.
Her dissent was notable as the policymaker had taken office only in August and has participated in only three FOMC meetings. What’s more, Hammack, with a long career in financial markets before coming to the Cleveland Fed, had only recently given her first policy speech, where she had suggested now was a time for caution with monetary policy.
(Reporting by Michael S. Derby; Editing by Chizu Nomiyama)
