Will the U.S. cut interest rates in June? "New Federal Reserve News Agency": Some people are overinterpreting!
Renowned financial journalist Nick Timiraos, known as the "New Federal Reserve Correspondent," posted on the X platform that Cleveland Fed President Loretta Mester's remarks on Thursday attracted widespread attention, as some market participants were eager to draw an overly optimistic conclusion that this indicated the Fed might be ready to cut interest rates as early as June. Timiraos pointed out that Mester's core view is that the Fed will not hastily lower interest rates before obtaining clearer information about the economic outlook
Yesterday, Cleveland Federal Reserve President and 2026 FOMC voting member Beth Hammack ruled out the possibility of a rate cut in May but stated that if economic data clearly shows direction, the Federal Reserve could take action as early as June with clear and convincing data.
On Friday, renowned financial journalist Nick Timiraos, known as the "New Federal Reserve Correspondent," posted on X platform that Cleveland Fed President Beth Hammack's remarks on Thursday attracted widespread attention, as some market participants were eager to draw an overly optimistic conclusion, believing it indicated that the Fed might be ready to cut rates as early as June.
Timiraos pointed out that when asked when the Fed might cut rates, Hammack's core point was that the Fed would not act hastily until it had more clear information about the economic outlook.
She rebutted concerns that the Fed is always "behind the curve" and noted that once circumstances change, the Fed is capable of acting swiftly. The "if" she mentioned carried a lot of implications, and she made it clear that she was talking about any future point in time, not limited to June:
You have seen that this is not a Federal Reserve that is afraid to act quickly if we indeed have clear and strong evidence in June, July, or September.
Timiraos noted that Hammack was interrupted before she finished this statement.
Later in the conversation, the topic returned to the specific "June" issue, and Hammack again provided an answer that included not one, but two conditional "ifs":
If we have clear and strong data in June, then I think you will see the committee take action, if we know which direction to act at that time.
Yesterday, following Cleveland Fed President Hammack's mention of a possible rate cut in June, as well as comments from another heavyweight official, Governor Waller, indicating that a severe downturn in the job market could lead the Fed to cut rates more and faster, U.S. stocks rebounded continuously over the two trading days on Thursday and Friday
