Fed's Hammack (2026 voter) sees no imminent need to change the stance of monetary policy in an economy where inflation is still “too high”

• Given the Fed’s need to balance “elevated” inflation and a “softening” job market, these factors joined with rate cuts done last year leave monetary policy “in a good position”.
• Under her base case, thinks policy should be on hold for quite some time as they see evidence that inflation is coming down and the labour market stabilises further.
• It’s easy to envision other scenarios, as well, so she sees two-sided risks to rates.

Fed's Hammack indicates that with inflation still elevated but showing signs of moderation, there's no immediate need to adjust monetary policy. This suggests that the Fed may remain on hold for a while, which could stabilize expectations around rates and provide support for risk assets. However, her acknowledgment of two-sided risks implies that future shifts in policy are still possible depending on how inflation and the job market evolve.