Fed's Hammack: Rate cut was a close call, favored holding steady

In a statement released on Friday, Federal Reserve Bank of Cleveland President Beth Hammack noted that she dissented because the data supported holding the policy rate steady, per Reuters.

"Based on my estimate that monetary policy is not far from a neutral stance, I prefer to hold policy steady until we see further evidence that inflation is resuming its path to our 2 percent objective,” Hammack explained.

“Maintaining the target range for the federal funds rate at 4-1/2 to 4-3/4 percent at the December 2024 meeting was the best choice given the strength of recent economic data, accommodative financial conditions, and my forecast that inflation will remain somewhat above 2 percent over the next year amid a healthy labor market,” she said.

Market reaction

The US Dollar Index recover modestly from session lows following these comments and was last seen losing 0.35% on the day at 108.05.