{"id":102607,"date":"2026-05-07T16:36:12","date_gmt":"2026-05-07T16:36:12","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/102607\/"},"modified":"2026-05-07T16:36:12","modified_gmt":"2026-05-07T16:36:12","slug":"feds-hammack-looks-to-hold-rates-for-quite-some-time-amid-iran-conflict-and-uncertainty","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/102607\/","title":{"rendered":"Fed’s Hammack looks to hold rates for ‘quite some time’ amid Iran conflict and uncertainty"},"content":{"rendered":"\n

Cleveland Federal Reserve president Beth Hammack added to a growing chorus from central bank officials projecting that interest rates are likely to remain on hold, given the uncertainty about the impact the conflict in Iran is having on both inflation and the job market.<\/p>\n

\u201cRight now, my base case is that we’ll be on hold for quite some time around this level, which is pretty close to what I think of as the natural rate of interest,\u201d Hammack said Thursday in an interview with NPR. \u201cI think we have pressures coming on both sides of our mandate.\u201d<\/p>\n

Hammack said she is watching how long the war in Iran, which is now in its third month, continues. She noted that typically when there\u2019s an oil price surge from a conflict, the central bank tends to treat it as a one-off and looks through it with the expectation that prices will come back down. But she worries that with inflation stuck above the Fed\u2019s 2% goal for more than five years, the pressures from the Iran war could spell more persistent inflation.<\/p>\n

Read more:\u00a0How jobs, inflation, and the Fed are all related<\/a><\/p>\n

\u201cThis is probably the fourth shock that we’ve had in five years,\u201d Hammack said, referencing the pandemic\u2019s disruption of global supply chains, the Russia-Ukraine invasion, and tariffs.<\/p>\n

\u201cIs each one of these really independent? Is each one of these going to be short-lived, or is this starting to build in consumers and businesses’ minds to create more of an inflationary mindset?\u201d<\/p>\n

\"FILE Federal Reserve Bank of Cleveland President Beth Hammack speaks during an interview with Reuters in New York City, US, April 24, 2025. (REUTERS\/Mike Segar) \u00b7 Reuters \/ REUTERS <\/p>\n

Hammack was one of three members of the Federal Open Market Committee who supported holding rates steady, but dissented over language in the policy statement that she felt signaled the next move would be an interest rate cut.<\/p>\n

The policy statement released by the FOMC following the April 29 meeting said officials will consider the extent and timing of \u201cadditional adjustments\u201d to interest rates.<\/p>\n

Hammack said that since the conflict in Iran could impact both inflation and the job market \u2014 the two sides of the Fed\u2019s mandates \u2014 she felt the Fed needs to be \u201ca little bit more neutral\u201d about how things will play out and what that might mean for interest rates.<\/p>\n

\u201cThe statement that we put out is that interest rates were on hold, but we have this signal in there that it’s more likely that the next move will be a move down,\u201d said Hammack. \u201cI thought that was a little bit misleading, just given my view of where the economy is.\u201d<\/p>\n

Separately on Thursday, Boston Fed president Susan Collins, who is not a voting member of the Federal Open Market Committee this year, said she too disagreed with the language in the policy statement suggesting the next move would eventually be a rate cut.<\/p>\n

In an interview with Bloomberg News, Collins said she was \u201cstrongly supportive\u201d of the decision to leave rates unchanged, but that she also preferred to adjust the statement to \u201cnot be as closely aligned with language that has been associated with the presumption that the next move will be a cut.\u201d<\/p>\n

Collins sees leaving interest rates on hold \u201cfor a longer time period, with further easing further down the road.\u201d Though she also warned the Fed might have to consider a rate hike under certain circumstances, as she worries that inflation could be more persistent.<\/p>\n

Minneapolis Fed president Neel Kashkari and Dallas Fed president Lorie Logan also dissented over the wording in the April policy statement.<\/p>\n

The disagreement within the central bank comes as Kevin Warsh is set to take the helm as Fed chair mid-month. Warsh said during his confirmation hearing that he favors \u201cmessier\u201d interest-rate-setting meetings, where a \u201cgood family fight\u201d can lead to better economic decisions.<\/p>\n

Hammack said she\u2019s \u201cexcited\u201d for Warsh to come on board because he will bring different insights and different perspectives to have a broad debate.<\/p>\n

\u201cRight now, there’s a lot of uncertainty, and I think uncertainty in that economic outlook should translate into uncertainty in our policy in terms of which way we need to move for interest rates,\u201d said Hammack.<\/p>\n

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms<\/a> and on Instagram<\/a>.<\/p>\n

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