ECONOMY

Cleveland Fed official signals possible interest-rate shift

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Washington. Beth Hammack, president of the Federal Reserve Bank of Cleveland, said Monday in an Associated Press interview that the Federal Reserve could raise its benchmark interest rate if inflation remains persistently above the central bank’s 2% target, even while expressing a preference to keep rates unchanged for some time. Her comments this week prompted analysts to note that policymakers are weighing trade-offs between curbing inflation and supporting employment; she said the Fed could cut rates if higher gas prices slow the economy and unemployment rises, indicating that upcoming policy moves will depend on incoming inflation and labor-market data.

Prepared by Christopher Adams and reviewed by editorial team.

Timeline of Events

Inflation was elevated prior to the Iran war, contributing to price pressures.
Rising gas prices added to inflation concerns and household cost pressures.
On Monday, Beth Hammack gave an Associated Press interview outlining policy scenarios.
Hammack said the Fed might raise rates if inflation stays above 2% or cut rates if unemployment rises.
Policymakers now await incoming inflation and labor-market data to determine next policy steps.

News Intelligence

Your wallet could feel this. If the Fed raises interest rates, loans like mortgages and credit cards could get more expensive. But if unemployment rises and rates are cut, your savings might grow slower. Keep an eye on your budget and financial plans.