Cleveland Feds Hammack Sees Steady Rates Amid Iran Conflict

Federal Reserve Bank of Cleveland President Beth Hammack stated Thursday that interest rates are likely to remain steady for an extended period amid significant economic uncertainty, particularly from the ongoing conflict in Iran now in its third month.

In an interview with public radio station WOSU, Hammack said her base case calls for rates to hold "for quite some time around this level," which she described as close to the natural rate of interest. The Federal Open Market Committee maintained its target range at 3.50 percent to 3.75 percent following its April 29 meeting. Hammack supported the decision to keep rates unchanged but was one of three officials who dissented on the policy statement's wording. That language indicated the Fed would consider the extent and timing of additional adjustments, which she viewed as signaling a future rate cut.

"I think our statement should have a pretty neutral stance about whether the next move is down or up or just on hold for a really long period of time," Hammack said. She noted the statement's phrasing appeared "a little bit misleading" given current conditions.

Hammack highlighted pressures on both sides of the Fed's dual mandate of...