Federal Reserve Official Urges Patience on Trump Policy Impacts
Cleveland Federal Reserve President Beth Hammack stated that the Federal Reserve needs more time to assess the effects of President Donald Trump’s policies, including tariffs, before determining an appropriate response. She emphasized the uncertainty surrounding the administration’s broad agenda and the necessity of clear evidence before taking action.
Hammack expressed readiness to act based on compelling data but highlighted the complexity of the situation due to the wide-ranging policies in discussion. With limited data available before the Fed’s next meeting in June, she stressed the need to observe how these policies unfold and their impact on the economy.
While recent economic data revealed a contraction, Hammack viewed the situation as fluid and cautioned against premature judgments. She acknowledged the resilience of the economy but underscored the need to monitor developments closely.
Addressing the job market’s strength and potential risks posed by new tariff policies, Hammack and her colleagues emphasized the importance of focusing on employment if the economy weakens. The Fed is closely monitoring inflation and unemployment risks but remains cautious in its approach, given the uncertainties surrounding trade negotiations and tariff impacts.
Hammack noted that businesses in her district are preparing contingency plans in case of decreased demand, but currently, they are retaining their workforce amid uncertainties. She highlighted the need to consider the holistic impact of various policies, including spending, deregulation, and tariffs, on the economy.
As the Fed continues to evaluate the situation, officials are vigilant about potential inflation risks and the need for a comprehensive approach to address evolving economic conditions.
(Reporting by Ann Saphir; editing by Diane Craft)
