March 4 (Reuters) – Federal Reserve Bank of Cleveland President Beth Hammack said it was too early to gauge the economic impact of the Iran war and backed holding interest rates steady for “quite some time”, in an interview with the New York Times published on Wednesday.
“It’s important to make sure that we’re maintaining policy at a level where we can drive inflation back down to target while balancing any potential softness in the labor market,” she was quoted as saying.
Federal Reserve officials on Tuesday began taking stock of the widening conflict in the Middle East that could pose near-term risks to both U.S. inflation and growth despite the economy’s relative resilience to energy price shocks.
Hammack also said she expected inflation to ease gradually over the summer but remain above target beyond the end of the year.
With inflation too high and the labor market relatively steady, the central bank should keep its focus trained on stamping out price pressures, Hammack told the newspaper.
“If we see more weakness emerging in the labor market, it could mean that we need to provide more accommodation. If we don’t see inflation moving toward target as I expect, it could mean that we need to put more restriction on the economy,” she was quoted as saying.
(Reporting by Chandni Shah in Bengaluru; Editing by Andrew Heavens and Andrei Khalip)
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