Fed's Hammack: Clear And Convincing Data Could Pave The Way For June Rate Cut
1min read Cleveland Federal Reserve President Beth Hammack said in an interview on Thursday that while a May rate cut is highly unlikely, the Fed could act at its next meeting in June if economic data provides clear and convincing direction by then.
"If we have clear and convincing data by June, then I think you'll see the committee move if we know which way is the right way to move at that point in time," Hammack said when asked about the possibility of a June rate cut.
Her remarks triggered a swift market reaction, with interest rate swaps briefly pricing in a roughly 65% chance of a June rate cut before easing back slightly.
Hammack emphasized that she has not set a "baseline scenario" for the most likely economic path. She noted that policymakers are unlikely to have enough information to adjust policy at the next Federal Open Market Committee (FOMC) meeting in early May. However, if upcoming data provides more clarity on growth and inflation trends, the Fed could act in subsequent meetings.
Hammack, along with several other Fed officials, has repeatedly stressed that the current policy path remains data-dependent. Amid lingering global policy uncertainty, they prefer to wait for clearer economic signals before deciding on the direction of interest rates.
She described the current moment as one requiring "patience," adding, "I think we need to be patient. I think this is a time when we want to make sure we're moving in the right direction, than moving too quickly in the wrong direction." However, she noted that once the outlook becomes clear, "people have seen that the Fed can move quickly."
Hammack also pointed to lingering uncertainties around immigration, trade, and regulatory policies, which could influence the timing and pace of future Fed decisions.
"It could be that we have the two sides of our mandate and conflict, which is the most challenging for monetary policy," she added. "If it's higher inflation, lower employment, that's where things get really complicated."
"What we're hearing right now is that the uncertainty is really weighing on businesses," she said. "It's creating issues for them in terms of planning, in terms of thinking about where they're going to go, and so some of them have put pauses on whether they're going to make bigger investments, whether they're going to invest in new facilities, new capital plans, and then they're thinking about their hiring plans."
The next FOMC meeting is scheduled for May 6-7.
