Fed’s Hammack says no longer appropriate to signal rate cut bias

By Michael S. Derby

May 1 (Reuters) – Federal Reserve Bank of Cleveland President Beth Hammack said Friday she dissented against the central bank holding on to an easing bias this week due to uncertainty around the economic and inflation outlooks.

“Uncertainty around the economic outlook has increased in 2026 and makes the future path for monetary policy more uncertain,” Hammack said in a statement.

The official said she voted against the Fed’s policy statement on Wednesday that left the interest rate target range unchanged at between 3.5% and 3.75% because it retained language that pointed to “a pause rather than an end to the easing cycle. I see this clear easing bias as no longer appropriate given the outlook.”

Hammack said there are now upside risks to inflation and downside risks to the job market. She added inflation pressures are “broad based” and “and rising oil prices present an additional source of inflationary pressure.”

Hammack’s dissent took place amid an unusually fractious Federal Open Market Committee vote that saw four officials break from the consensus.

Hammack, as well as the leaders of the Minneapolis and Dallas Fed banks, voted against the FOMC statement due to its continued inclusion of language that suggested that the next policy move by the central bank would be an easing. One official, Fed Governor Stephen Miran, dissented in favor of a rate cut.

(Reporting by Michael S. Derby; Editing by Chizu Nomiyama )