Cleveland Fed President Beth Hammack is her perspective this morning following Wednesday's split FOMC decision. While the committee voted to lower rates by 25 basis points, the decision was far from unanimous, highlighting a deepening divide among policymakers regarding the path forward for inflation and the labor market.

The Split Decision: A Rare 9-to-3 Vote

The Federal Reserve voted to cut its benchmark interest rate by 25 basis points, but the decision revealed significant internal disagreement.

  • The Majority (9 Votes): Opted for a standard 25 basis point reduction.

  • The Hawks (2 Dissents): Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted to keep rates unchanged, arguing for patience to ensure inflation is fully tamed.

  • The Dove (1 Dissent): Fed Governor Stephen Miran voted for a more aggressive 50 basis point cut, likely prioritizing labor market support.

Hammack’s Stance: Aligning with the Hawks

Although she was not a voting member at this meeting, she will be a voting member in January and for the entirety of 2026. President Hammack prior to the meeting made it clear she aligns with the "no change" camp.

Her comments today:

  • The labor market has been gradually cooling but inflation above the target.
  • Balancing both sides of Fed mandate is challenging.
Source: Investing Live