Federal Reserve Bank of Cleveland President Beth Hammack said on Wednesday that she supports holding interest rates steady but also acknowledged the possibility of raising or cutting rates in order to address the risk of inflation.
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New trading tool for QQQ bulls“My baseline is that we’re going to remain on hold for a good while, but I do think that there’s two-sided risks to rates,” Hammack told CNBC‘s “Squawk Box.”
Inflation Poses a Bigger Risk than a Weak Labor Market, Says Hammack
Hammack believes rising inflation is a much bigger risk than a weak labor market, pointing out that inflation has remained above the Fed’s target of 2% for five years. “Individuals have experienced a decade’s worth of inflation in that time period,” she said.
The Fed will make its next interest rate decision on April 29 and is widely expected to leave rates unchanged. Investors are pricing in a 68.3% probability of steady rates through year-end, according to the CME FedWatch tool.