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

Odaily Planet Daily News Cleveland Fed President Hammack believes that the Fed can continue to steadily reduce its balance sheet during a period of government fiscal uncertainty, while she noted that she is not inclined to support rate hikes even if inflationary pressures do not subside quickly enough. Hammack said her "baseline preference" is that the Fed continues to advance the reduction of its balance sheet while the government sorts out its spending plans and adjusts the debt ceiling to meet its borrowing needs. Hammack said in an interview on Thursday that after the fiscal path becomes clear, if there is a structural imbalance in market liquidity, temporary repurchase operations can be used to "re-inject liquidity into the system until the 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)