Finance

Fed’s Hammack calls for patience in assessing what impacts tariffs will have on the economy

Published

4 hours ago

April 24, 2025

Cleveland Fed President Beth Hammack said Thursday she thinks policymakers need to be patient rather than pre-emptive in assessing how tariffs will impact inflation and growth.

In her first broadcast interview since taking the reins at the central bank district in August 2024, Hammack noted the high level of uncertainty now and did not commit to a specific course of action regarding interest rate policy.

“I think we need to be patient. I think this is a time when we want to make sure we’re moving in the right direction, than moving too quickly in the wrong direction,” she told CNBC’s “Squawk Box.” “So I would rather take our time make sure we’re looking at the data, the hard data … which are actually really good.”

Hammack’s remarks come at a sensitive time for the Fed, which has been left to assess the impact of President Donald Trump’s tariffs on both inflation and employment.

Several central bank officials, including Chair Jerome Powell, have said the duties pose threats to both sides of the Fed’s “dual mandate,” posing another challenge on how to calibrate monetary policy. Hammack also voiced concerns over how the Fed might balance those priorities.

“It could be that we have the two sides of our mandate and conflict, which is the most challenging for monetary policy,” she said. “If it’s higher inflation, lower employment, that’s where things get really complicated.”

Markets strongly expect the Fed will stand pat on interest rates when it meets May 6-7, then resume cutting rates in June with the likelihood of a total three or four cuts by the end of the year, according to CME Group data.

“If we have convincing data by June, then I think you’ll see the committee move if we know which way to move at that point,” Hammack said.

However, uncertainty over tariff policy and how the Fed might react has contributed to substantial market volatility in recent months, with stocks struggling, Treasury yields rising and the U.S. dollar falling.

A former Goldman Sachs executive, Hammack said she is sensitive to market movements but only in how they affect broader economic conditions.

“Our job is not to focus on what the markets are doing. Our job is to focus on how that’s going to impact households and businesses, and what that’s going to mean in the real economy,” she said. “So we’re not steering the markets. We’re steering the real economy.”

Hammack noted that the “hard” economic data such as unemployment and inflation is still relatively good, while “soft” data such as surveys shows elevated levels of concern.

“What we’re hearing right now is that the uncertainty is really weighing on businesses,” she said. “It’s creating issues for them in terms of planning, in terms of thinking about where they’re going to go, and so some of them have put pauses on whether they’re going to make bigger investments, whether they’re going to invest in new facilities, new capital plans, and then they’re thinking about their hiring plans.”

“I wish I had a crystal ball. We don’t have one,” Hammack added.

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Finance

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23 minutes ago

April 24, 2025

Business Finance News

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Finance

China says no ongoing trade talks with the U.S., calls for canceling ‘unilateral’ tariffs

Published

9 hours ago

April 24, 2025

Business Finance News

Steel piled up at Guoyuan Port in Chongqing, China, on April 20, 2025.

Cfoto | Future Publishing | Getty Images

BEIJING — China on Thursday said that there were no ongoing discussions with the U.S. on tariffs, despite indications from the White House this week that there would be some easing in tensions with Beijing.

“At present there are absolutely no negotiations on the economy and trade between China and the U.S.,” Ministry of Commerce Spokesperson He Yadong told reporters in Mandarin, translated by CNBC. He added that “all sayings” regarding progress on bilateral talks should be dismissed.

“If the U.S. really wants to resolve the problem … it should cancel all the unilateral measures on China,” He said.

U.S. President Donald Trump and Treasury Secretary Scott Bessent this week indicated that there might be an easing in tensions with China. The White House earlier this month added 145% tariffs on Chinese goods, to which Beijing responded with duties of its own and increased restrictions on critical minerals exports to the U.S.

The commerce ministry’s comments echoed those of Chinese Foreign Ministry Spokesperson Guo Jiakun, who said on Thursday afternoon that there were no ongoing talks, according to state media.

Both spokespersons held to the official line that China would be willing to talk to the U.S. subject to Beijing being treated as an equal.

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“China definitely wants to see the trade war deescalate, as it hurts both economies,” said Yue Su principal economist, China, at The Economist Intelligence Institute. “However, due to the inconsistency of Trump’s policies and the lack of clarity around what he actually wants, China’s strategy has shifted from focusing on ‘what you need’ to ‘what I need.’ Their request for the U.S. to cancel ‘unilateral’ tariffs reflects that shift.”

China earlier this week threatened countermeasures against countries that might make deals with the U.S. at the expense of Beijing’s interests.

“We also need to recognize that this is a ‘whatever it takes’ moment for China in terms of U.S.-China relations,” Su said. “I wouldn’t be surprised if China adopts a more hawkish stance if the U.S. continues to escalate tensions.”

Several Wall Street banks have cut their China GDP outlook in the last few weeks in light of the tariffs and escalating tensions with the U.S.

The Commerce Ministry on Thursday emphasized government and business efforts to help companies sell goods meant for exports to the Chinese market instead.

The U.S. is China’s largest trading partner on a single-country basis. But in the last several years, Southeast Asia has surpassed the European Union to become China’s largest trading partner on a regional basis.