Fed’s Hammack: Fed should be neutral in policy stance

Beth Hammack, President of the Federal Reserve (Fed) Bank of Cleveland, in an interview on a public radio station on Thursday. She claimed that she sees a lot of uncertainty in the economic outlook and that the Fed should be more neutral in its policy stance given this uncertainty.

Key takeaways:

I see a lot of uncertainty in economic outlook.

Fed should be neutral in policy stance outlook given uncertainty.

Everyone is feeling increase in gasoline prices.

Is worried about outlook for price pressures.

Higher prices are weighing on consumers' ability to spend.

Iran war can impact both sides of Fed's mandate.

There was a lot more consensus than it appears at Fed meeting.

Sees interest rates on hold for quite some time.

Sees low and stable unemployment right now.

Job market remains low hire, low fire environment.

Fed has been missing inflation target for years.

War means price pressures could be more persistent.

High inflation forcing more people toward trade offs.

Lowering interest rates more than justified will drive up inflation.

Fed tries to be as apolitical as possible.

Powell has done an excellent job at Fed.

'Excited' for new Fed chair Warsh when he arrives.

Is watching closely for how long Iran war lasts.

Inflation expectations are pretty well anchored right now.

High inflation could start weighing on demand.

Uncertainty over outlook should translate to policy uncertainty.

Can't put hard number on how long Fed should hold rates steady.”