Fed’s Hammack says there is time to weigh next rate move

Federal Reserve Bank of Cleveland President Beth Hammack said policymakers still have time to assess incoming economic data before deciding their next move on interest rates, Reuters reported.

Hammack told PBS NewsHour that September’s U.S. employment report, which showed payrolls rising by 29,000 and the unemployment rate climbing to 4.2%, was broadly consistent with recent labour market trends.

She pointed to average job creation of 41,000 per month over the past year, a pace she said was largely in line with her estimate of the level needed to keep the labour market stable.

The comments suggest the weak September headline number alone may not be enough to determine the Fed’s next policy decision.

Hammack said policymakers will receive more information before the Federal Open Market Committee meets later this month, giving officials time to assess the appropriate stance needed to meet the central bank’s employment and inflation objectives.

The Cleveland Fed president has been an early supporter of higher interest rates to address inflation pressures that Fed officials consider too high.

Her comments follow similar remarks from several other Fed officials this week, indicating that policymakers have time to examine economic data before considering another increase in borrowing costs.

The Fed raised its benchmark interest rate by 25 basis points last month, bringing the target range to 3.75% to 4%. Officials also projected another increase before the end of the year.

Recent comments from policymakers have indicated that the central bank is unlikely to change rates at its Oct. 27-28 meeting, leaving the timing of any further tightening dependent on incoming economic data.

The September employment report has added another data point for policymakers balancing signs of slower hiring against continued concerns over inflation.