FED Official Set to Vote on Interest Rates Next Year Comments on Economic Outlook

Monetary Policy Insights: Federal Reserve member Beth M. Hammack indicated that current monetary policy may be below the neutral level, potentially stimulating the economy further, while expressing concerns about underreported inflation due to data collection issues during the government shutdown.

Inflation Concerns: Hammack suggested that actual inflation could be closer to 2.9%–3.0% rather than the reported 2.7%, indicating that the decline in inflation may not be as significant as expected, which influences his cautious stance on interest rate cuts.

Interest Rate Outlook: Despite three recent interest rate cuts, Hammack believes no further cuts are necessary in the near term, emphasizing the need for stronger evidence of slowing inflation or labor market weakness before making additional changes.

Future Voting Rights: Hammack, who will gain voting rights on the interest rate decision committee next year, stated he anticipates maintaining current interest rates at least until spring, pending clearer signs of inflation trends or labor market conditions.