Two new voting members of the Federal Reserve have voiced their preference for holding interest rates steady, citing persistent inflation as a primary concern.Cleveland Fed president Beth Hammack and Dallas Fed president Lorie Logan articulated their positions during recent speeches, reflecting a cautious approach to monetary policy.At the Ohio Bankers League Economic Summit, Hammack stated, "I believe monetary policy is in a good place to stay on hold as we assess the incoming data and weigh if, and how, policy may need to adjust further." She indicated that she expects rates to remain unchanged for an extended period as the Fed monitors economic indicators.
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finance.yahoo.comHammack highlighted that inflation remains elevated, having hovered around 3% for the past two years.She emphasized the necessity of seeing clear evidence of decreasing prices before considering any adjustments to interest rates.Rather than attempting to "fine-tune" rates, she expressed a preference for a patient approach, noting that the Fed's current policy rate is near neutral and not significantly constraining economic activity.
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finance.yahoo.comcbsnews.comLogan echoed Hammack's concerns, expressing anxiety about inflation's persistence.In her remarks, she indicated that the three rate cuts implemented last year have potentially increased the risk of sustained inflation."Right now, I am more worried about inflation remaining stubbornly high," she stated during her speech in Austin, Texas.Logan underscored the importance of upcoming data to determine if inflation is trending toward the Fed's target and whether the labor market remains stable.She suggested that if inflation declines but the job market cools, further rate cuts could be warranted.
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finance.yahoo.comThe Federal Reserve's decision to maintain interest rates comes after a series of rate cuts aimed at protecting the job market from potential downturns.The current federal funds rate is set between 3.5% and 3.75%, reflecting a pause in the easing cycle that began in September 2025.This strategic hold allows the Fed to evaluate economic activity and inflation trends more comprehensively.
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jpmorgan.comcnbc.comRecent data show that while inflation has moderated slightly, it remains above the Fed's 2% target.The Consumer Price Index (CPI) recorded an annualized rate of 2.7% as of December, indicating some improvement but still reflecting elevated inflationary pressures.The Fed's cautious stance is partly influenced by uncertainties surrounding economic growth and the impact of tariffs on consumer prices, which have added complexity to the economic landscape.
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cbsnews.comedition.cnn.comThe Fed's leadership has been under scrutiny, with Chair Jerome Powell facing external pressures regarding interest rates.Despite this, Powell has maintained that the Fed's current policies are appropriate given the existing economic conditions.During a recent press conference, he remarked, "The economy is not performing as though restrictive policy were holding it back inappropriately," reinforcing the idea that a measured approach is necessary as the Fed navigates its dual mandate of promoting maximum employment and stable prices.
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cbsnews.comedition.cnn.comAs the Fed prepares for its next meeting, scheduled for March 17-18, policymakers will continue to scrutinize incoming economic data to inform their decisions.Analysts suggest that the Fed will likely keep rates steady at least until mid-2026, as they seek to achieve a balance between inflation control and economic growth.
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jpmorgan.comcnbc.comIn summary, the positions taken by Hammack and Logan reflect a broader consensus among some Fed officials to prioritize stability in interest rates amid ongoing inflation concerns.Their cautious approach underscores the complexities facing the central bank as it aims to navigate a challenging economic environment while fulfilling its mandate.
