Cleveland Federal Reserve President Beth Hammack on Thursday gave indications that she thinks the central bank could be nearing the end of what could be a brief rate-cutting cycle.<\/p>\n
The policymaker told CNBC that she thinks the current level of interest rates is \u201cbarely restrictive, if at all\u201d when it comes to the economic impact. <\/p>\n
Restrictiveness is a key metric for Fed officials, who are divided ideologically over whether labor market weakness or inflation is a bigger threat. Hammack has been more in the hawkish camp when it comes to inflation, preferring higher rates and more restrictive policy as a bulwark against another surge in prices.<\/p>\n
\u201cI think that we need to maintain a modestly, somewhat restrictive stance of policy to make sure that we are continuing to bring inflation back down to our 2% objective,\u201d she told CNBC\u2019s Steve Liesman on \u201cSquawk on the Street.\u201d<\/a> \u201cRight now, to me, monetary policy is barely restrictive, if at all, and I think we need to make sure that we\u2019re maintaining that somewhat restrictive stance to bring monetary to bring in place.\u201d<\/p>\n Hammack added that she thinks the current federal funds rate, targeted in a range between 3.75%-4%, is \u201cright around a neutral rate,\u201d indicating it does not need to come down much further.<\/p>\n As a voting member of the Federal Open Market Committee this year, Hammack serves as a key policy voice. <\/p>\n The Fed next meets Dec. 9-10<\/a>, and market expectations have swung from a near-certainty that the committee would approve a third consecutive quarter percentage point reduction to now pricing in about a 60% probability that the committee will stand pat, per the CME Group\u2019s FedWatch<\/a> tracker of futures prices. Minutes from the October meeting, released Wednesday, detailed the sharp divide<\/a> among committee members.<\/p>\n While focused on inflation, Hammack expressed concern over current price levels, noting that interviews she and her staff have conducted around the Cleveland area indicate labor market pressures as well as inflation concerns that are causing difficulty for households to make ends meet.<\/p>\n \u201cWhat we hear from the workers is that they\u2019re holding on to their jobs for dear life, if they have them,\u201d she said. \u201cWe are in this slow, this low-hiring, low-firing environment. But what I also heard \u2026 was that the money that they have coming in is just not stretching as far as it used to. What used to cost $30 now costs $5, and so \u2026 that inflationary pressure is still very salient for them.\u201d<\/p>\n Addressing the September nonfarm payrolls report<\/a> released Thursday, Hammack called the picture \u201cmixed\u201d as it showed both higher-than-expected payrolls growth and a tick up in the unemployment rate. <\/p>\n<\/div>\n
![\"Watch](\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/108229219-1763654555888-1763653159-42630018147-hd.jpg?v=1763654558&w=750&h=422&vtcrop=y\")