Fed Hammark: No support for rate hikes, Fed can continue to steadily shrink its balance sheet

CoinRank News: Cleveland Fed President Hammack believes the Fed can continue to steadily shrink its balance sheet during a period of government fiscal uncertainty, while noting that she is not inclined to support rate hikes even if inflationary pressures do not subside quickly enough. Hammack said her baseline preference is for the Fed to continue to advance its balance sheet reduction while the government sorts out its spending plans and adjusts the debt ceiling to meet its borrowing needs. Hammack said in an interview Thursday that once the fiscal path becomes clear, if there is a structural imbalance in market liquidity, temporary repurchase operations can be used to reinject liquidity into the system until market demand is understood. She also said that if inflationary pressures remain above the 2% target, she does not expect to raise interest rates, but the possibility of a rate hike is not zero. But so far, I think (expectations) are still stable. (Jinshi)