Harker, Federal Reserve: There is no urgent reason to cut interest rates; waiting is the best strategy.

Cailian Press, July 15th (Editor: Niu Zhanlin)
On Monday local time, Bess Hamerk, Chair of the Cleveland Fed, stated that given the current high inflation and the uncertainty of Trump’s tariffs impacting prices, she believes there is no immediate need for a rate cut.
Hamerk said in an interview with the media, “I think the current interest rates are very close to what we call the neutral rate level. I see a resilient economy, a well-functioning economy. I believe it is not necessary to cut rates unless there is a clear weakness in the labor market.”
In her view, the inflation rate remains above the Federal Reserve’s 2% target, which is the main reason for not considering a rate cut at present. “The inflation rate has fallen from over 7% during the peak of the pandemic to below 3%. However, it has been hovering around 3% for some time now, so I think it’s important that we wait and see how all the new policies announced will affect inflation.”
Speaking about the FOMC meeting scheduled for July 29th to 30th, Hamerk said, “I always remain open-minded during each meeting, waiting to see what economic data will tell us and the direction of discussion.”
She added, “But based on my current observations, we have reached our employment goals but not our inflation goals. Therefore, I believe it is necessary to continue maintaining restrictive monetary policy to ensure we bring inflation down to the 2% target.”
Most recent speeches by most Federal Reserve officials seem to suggest that the federal funds target rate range will remain unchanged at 4.25% to 4.5% by the end of this month. At the June meeting, Fed officials had projected that there might be two rate cuts later this year, while investors generally expect the Fed to start cutting rates at its September meeting.
However, a few Fed officials are willing to cut rates earlier, believing that Trump’s constantly changing import tariff policies will have a one-time impact on prices, making this impact negligible.
Federal Reserve Board member Christopher Waller last week said, “Our monetary policy may have been too tight, and we could consider a rate cut in July.” He also emphasized that his views on interest rates “are unrelated to politics.”
Despite Trump continuously pressuring the Fed to cut rates quickly, Fed officials have thus far focused on the economic data itself.
Recently when asked whether he would fire Powell, Trump said there were no plans for that, but he also once again described Powell’s work as “very poor.”
Hamerk stressed in an interview that the impact of tariffs has not yet fully emerged. She said, “At present, the best strategy seems to be to wait and see because we still do not know how much these tariffs will ultimately impact the economy.”