Fed’s Hammack Dismisses Rate Cut Case as Markets Reprice Expectations
Cleveland Fed President Beth Hammack pushed back against expectations for a near-term interest rate cut, stating that current economic data does not support easing monetary policy.
Speaking to Yahoo News from the sidelines of the Kansas City Fed’s Economic Symposium in Jackson Hole, Hammack said, “Inflation is still too high and has been trending upward over the past year. If the meeting were held tomorrow, I wouldn’t see a case for lowering rates.”
She also noted that the inflationary impact of recently implemented tariffs is just beginning to show up in the data, with the bulk of the effect likely to materialize in 2027.
Markets React as Fed Messaging Turns More Hawkish
Hammack’s remarks reinforced a hawkish stance that aligns closely with Fed Chair Jerome Powell’s position, even in the face of internal dissent and mounting political pressure. At the last policy meeting, two FOMC members voted in favor of rate cuts, and President Trump has continued to publicly advocate for lower borrowing costs.
Her comments arrive amid a media push from prominent former officials calling for aggressive easing. Earlier today, former St. Louis Fed President Jim Bullard suggested policy rates should be cut by 100 basis points — well below their current level.
Bitcoin Slides as Rate Cut Odds Recede
Bitcoin has responded sharply to the shift in rate expectations. After hitting a record high above $124,000 last week — coinciding with a near-unanimous market belief in a September rate cut — the digital asset has dropped nearly 10% to trade around $112,800.
According to CME FedWatch data, the probability of a September cut has declined from 99% to 71% in just one week, as policymakers signal caution.
All Eyes on Powell’s Friday Address
Markets now await Jerome Powell’s keynote address on Friday morning, where he’s widely expected to reinforce the Fed’s wait-and-see approach. With inflation still running above target, Powell is unlikely to pivot dovish — a stance that could further cool investor expectations for a policy shift.
