By Michael S. Derby

NEW YORK (Reuters) – Federal Reserve Bank of Cleveland President Beth Hammack stated on Friday that she voted against the recent rate cut by the central bank. She emphasized that the economic strength and inflation outlook did not support a policy easing.

Hammack explained, "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," in a statement released as the quiet period surrounding the Federal Open Market Committee concluded.

She continued, "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."

This week, the Fed cut its federal funds target range by a quarter percentage point, bringing it to between 4.25% and 4.5%. In addition, the Fed revised its expectations for future rate cuts, anticipating higher inflation levels.

Hammack was the sole dissenter in the vote, which is significant considering she took office only in August and has attended just three FOMC meetings. Notably, with extensive experience in financial markets, Hammack had recently delivered her first policy speech, advocating for caution in monetary policy.