MNI BRIEF: Hammack Preferred Fed Keep Rates Steady This Week

Cleveland Fed President Beth Hammack said Friday she would not have supported a Fed interest rate cut this week, adding that inflation is too high and the policy rate is near neutral. 

"I would have preferred to have held rates steady at this meeting and not to reduce rates," Hammack said in Q&A at a Dallas Fed event. "We're right around my estimate of neutral, and I think we're barely restrictive, if at all. And so I do think we need to maintain some amount of restriction to help bring inflation back down to target."

Hammack said it's a challenging time for monetary policy. "We have inflation that is too high. It's about a percentage point above our target, and has been there for a long period of time," she said. (See: MNI INTERVIEW: More Fed Cuts Risk Inflation Spike-Weinberg)  

"My projection is that it's going to stay there probably for the better part of next year, before it starts making its way back down to 2% and on the other side," she said, also noting concerns about the labor market. "We've seen some emerging signs of softness in the labor market that we need to be attentive to."