Federal Reserve Official: Interest Rates Could Remain Steady for a Long Time
Cleveland Federal Reserve President Beth Hammack said the U.S. central bank sees no urgent need to change interest rates this year, noting that the economic outlook is characterized by "cautious optimism," according to Reuters on Tuesday, February 10.
In a speech to the Ohio Bankers Association, she said, "Interest rates could remain where they are for a long time," explaining that current monetary policy is neither restricting nor excessively stimulating economic activity.
Monetary Policy
Hammack stressed that it is best to be patient and assess the impact of previous interest rate cuts, emphasizing that the current rate stability reflects positive economic developments.
She added that she supports the Fed's January decision to maintain the target range for interest rates between 3.5% and 3.75%.
The Role of the Open Market Committee
Hammack has a voting seat on the Federal Open Market Committee, which is responsible for setting interest rates this year, giving her statements added weight in shaping future monetary policy.
Last year's cut
It's worth noting that the Federal Reserve cut interest rates by 75 basis points last year to support the struggling labor market, while maintaining sufficient restraint to bring inflation back to its 2% target after years of exceeding it.
Hammack's comments come as investors await clearer signals from the Fed regarding the future path of interest rates, amidst a delicate balance between supporting economic growth and controlling inflation.
