## Fed Officials Cautious on Rate Cuts Despite Market Optimism
Here’s a quick rundown of the latest from the Federal Reserve:
- **Hesitation on Rate Cuts:** Cleveland Fed President Beth Hammack expressed reluctance to lower interest rates due to persistent inflation concerns.
- **Differing Views:** Hammack’s stance contrasts with market expectations, which increased after Chair Jerome Powell’s speech hinted at potential easing.
- **Inflation Focus:** Hammack emphasized the need to maintain a “modestly restrictive” policy to bring inflation back to the Fed’s target.
- **Neutral Rate Perspective:** Hammack believes the “neutral” interest rate is higher than other Fed officials.
- **No Rush to Ease:** She doesn’t believe the Fed has much further to go and wants to avoid being “accommodative” to prevent reigniting inflation.
- **Market vs. Fed:** Futures traders are pricing in a high probability of a rate cut in September, despite the cautious outlook from some Fed officials.
- **Echoing Concerns:** Kansas City Fed President Jeffrey Schmid also voiced skepticism about rate cuts in a separate interview.
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