The markets are rapidly emphasizing the previously high probabilities of an imminent cuts of rates as the jets are taken into account in Jackson Hole for the economic symposium of the Fed of the city of Kansas.
Current data does not make the case for an ease of September, said Cleveland Fed President Beth Hammack, speaking with Yahoo News in Wyoming.
“We have too high inflation and has been in upward trend during the past year,” he said. “If the meeting were tomorrow, I would not see a case to reduce interest rates.”
In addition, he argued that inflation numbers barely begin to show the impact of tariffs and that the full effect would not be seen until next year.
Hammack’s comments are notable, since the president of the Fed, Jerome Powell, continues to have a lot of support in his aggressive position despite two dissident votes at the last policy meeting of the Central Bank and the continuous campaign of President Trump for lower rates.
His comments also occur after a series of potential replacements by Powell appeared in the waves in recent days to defend the very low interest rates. The last of this morning was the former head of the Fed of St. Louis, Jim Bullard, who defended the policy rates 100 basic points below the current level.
Just a week ago, Bitcoin played a record of more than $ 124,000 along with an expectation of almost 100% that the Fed would cut the rates next month. Seven days later, these chances have turned to 71%, according to CME Fedwatch and Bitcoin It has collapsed almost 10% to the current $ 112,800.
The markets can listen to Powell himself in his opening speech on Friday morning and at this point it is almost certain that he will not become a dove. On the other hand, it is likely to emphasize that inflation remains too hot and, therefore, the need to wait and see the approach to adjust monetary policy.
