Fed’s Hammack Signals Stability in Jobs, Keeps Policy Neutral

Beth Hammack, President of the Cleveland Fed, sent a clear signal to markets: the US labor market is stabilizing, and monetary policy remains neutral. Following the strong January Nonfarm Payrolls report, she noted that unemployment is holding steady, pointing to a resilient workforce.


Hammack highlighted that consumer spending is firm, largely driven by higher-income earners, while stressing that returning inflation to the Fed’s 2% target remains a priority. She emphasized that the central bank does not need to tweak rates immediately, as current policy is “right around neutral” and not placing significant restraints on the economy.

Key Highlights from Hammack’s Comments:

Labor market is finding a healthy balance.

Unemployment rate appears stable.

Consumer spending remains solid, led by upper-income households.

Fed policy is neutral; no rate adjustments are needed for now.
Inflation must return to the 2% target to ensure long-term stability.

US government debt remains a critical concern.

Investors are now turning their attention to upcoming CPI data and jobless claims, assessing whether the Fed will maintain its cautious stance or adjust policy later in the year. Markets see Hammack’s message as a signal that the Fed is comfortable letting the economy run without immediate rate changes, keeping a watchful eye on inflation trends.