Sing against Powell, the Fed's policy committee remains cautious about interest rate cuts next year.

On Friday, Cleveland Fed President Hameck pointed out in an interview that she remains cautious about cutting interest rates as long as inflation continues to pose a threat. Just yesterday, Hameck stated that she would not support a rate cut if the Fed were to convene a monetary policy meeting immediately. Hameck stated, "We have been above the inflation target for four consecutive years and we need to bring it under control. In my view, we need to maintain a moderately tight policy stance in order to bring inflation back to target levels." She emphasized that she does not want to shift to accommodative policy too early, "because once policy becomes too accommodative, it might reignite inflationary pressures." This stance is in stark contrast to market sentiment. Fed Chair Powell stated at the Global Central Bankers Symposium in Jackson Hole that the current situation "may warrant" policy easing, leading the market to heavily wager on a rate cut in September. According to the CME Group's FedWatch tool, traders are predicting a nearly 90% probability of a rate cut at the FOMC meeting in September. Hameck also revealed that her assessment of the so-called "neutral rate" (the level that neither stimulates nor restrains the economy excessively) is higher than that of most Fed officials. As a former Goldman Sachs executive, she is not a voting member of the Federal Open Market Committee (FOMC) this year and will not gain voting rights until 2026. In fact, Hameck is not the only one with a hawkish stance. Kansas City Fed President Schmiede also expressed doubts about a rate cut in an interview on Thursday. Schmiede is a voting member of the FOMC this year, but will not have another vote until 2028.