Fed's Hammack says financial conditions do not look restrictive
The remark comes as traders price near 90% odds of a December rate rise and markets wait on Warsh for a reading on the hawkish camp.
Published
Cleveland Fed President Beth Hammack said financial conditions do not appear restrictive right now.
The comment sits awkwardly next to her own argument through October that policy needs to tighten further and faster, a case she has made alongside Austan Goolsbee and Susan Collins against the more patient line taken by John Williams and Michelle Bowman. If conditions are already loose, that case weakens.
Goolsbee has called the September CPI report discouraging and pointed to AI-driven overheating as a risk, though he has stopped short of committing to a path. He has also said prices and costs are the clearest weak spot in the economy, with business contacts more worried about inflation than recession. Citigroup has added a December hike to its Fed forecast while still expecting cuts in 2027. Kevin Hassett has said a cooling inflation print could let the Fed hold rates, setting administration rhetoric against the hawkish bloc, though he has also said the market has confidence in the new Fed chair even as officials remain split.
Traders are already pricing roughly 90% odds of a December rate rise, with bets stretching toward further tightening through 2027. Hammack's remark lands as markets wait on Kevin Warsh's comments for a sign of whether that hawkish reading holds.