Fed’s Beth Hammack Says She Sees Two-Sided Risks to Interest Rates (Full Interview)

Well, I try not to make too much of any one individual number. And certainly this number was a disappointment, mostly because it means that there are more Americans who aren't working. That's what disappointed me in this report. We've seen the economy overall. It's been pretty healthy. It's been brightening. The outlook has been positive. When I'm out in the district talking with businesses, I hear them talking about their optimism and that they're looking to make more investments in their businesses and they think demand is going to be reasonably robust. But we've had a labour market that I would characterize as stabilizing. You know, it's been in that 4.3, 4.4 range for an unemployment rate perspective. Obviously, the headline jobless number has been the piece that's been a little bit weaker. When I talked to you last, it was August, which was the first of those reports where we saw more softening in the labour market. But it does look like it's been stabilizing. And I think part of that is due to the accommodation that we put into the economy towards the end of last year. And now we have a lot of tailwinds, I think, looking ahead in terms of the economy and in terms of growth. On the other side of our mandate, inflation has been above our target for five years. We've made virtually no progress over the past two years. We're still right around 3% on inflation. And so we need to make sure that we're maintaining a balance of policy that's going to help bring inflation back down to target while still supporting the labour market. So when I look at things broadly, to me it seems like there are two-sided risks to rates.

That's a great question. I think we're right around neutral. You know, there are a lot of different estimates of what that neutral rate is. To me, when I see the economy continuing to perform reasonably well, I take confidence that we're probably not being overly restrictive. When I talk to business leaders, they're still willing to make investments. They're taking out loans. The banks that I've talked to in the district see that their loan growth is improving. And so all of that says to me that we are around that neutral level and that we should stay at least around neutral to help make sure we're putting the right amount of pressure in, bring inflation back down to target.

Yeah, I'm just one person, but as I see it, I think we could be on hold for quite some time.

Well, I mean, there's been transitions and the chair of the committee since the body was founded in 1913. And so there've been a number of evolutions. And I think you saw the transition from Greenspan to Bernanke to Yellen to Powell. And I think this will be another transition and the committee will adapt. And I'm excited to work with the new chair. I think that whoever walks into that role, the chair seat, is a particularly influential seat. They historically have tried to bring the committee together and get a perspective on where people are. And I have every confidence that Kevin, if he assumes the job, is going to do his absolute best for the American public, like all the rest of the 18 of us do around that table.