Cutting Rates to Support Labor Market Risks Extending Period of Already-High Inflation, Cleveland Fed's Hammack Says

Cleveland Fed President Beth Hammack warns that cutting interest rates to support a weakening labor market may extend high inflation and encourage risky financial behavior. With inflation above the Fed's 2% target for 4.5 years, Hammack suggests maintaining a restrictive policy stance. The probability of a rate cut next month increased to 40%. Fed Governor Michael Barr emphasizes caution with interest rates, as inflation remains above target. The Fed's October meeting minutes reveal differing views on future rate decisions.