The markets quickly recalibrated previously lofty odds of an imminent cut rate as jets touched the Jackson hole for the Kansas City Fed’s Economic Symposium.
The current data does not make the case for a ease of September, Cleveland Fed President Beth Hammack said, talking to Yahoo News in Wyoming.
“We have inflation that is too high and trending upward last year,” he said. “If the meeting is open, I will not see a case for reducing interest rates.”
He even argued that inflation numbers were just beginning to demonstrate the impact of the tariffs and that the whole effect would not be visible until next year.
Hammack’s comments are noteworthy, showing fed chair Jerome Powell continues to have a lot of support at his Hawkish stance despite two dissident dovish votes at the last central bank policy meeting and President Trump’s ongoing campaign for lower rates.
His comments will also come after a series of potential Powell replacements appeared on airwaves in recent days to argue for sharp lower interest rates. The latest this morning was former ST Louis fed boss Jim Bullard, who argued for policy rates of 100 points basis below the current level.
Just a week ago, Bitcoin grabbed a record high of $ 124,000 at the same time as the almost 100% hope that the Fed would be able to compromise rates next month. Seven days later, those odds returned to 71%, According to the CME Fedwatch and bitcoin has dropped nearly 10% to the current $ 112,800.
The markets will hear from Powell right at his keynote address on Friday morning and at this point he will almost certainly not turn the dove. Instead, he is likely to emphasize that inflation will continue to remain overheated and thus the need to wait and see the approach towards repairing the financial policy.
