Fed Should Hold Rates Steady For 'Some Time' Amid Sticky Inflation, 2 Officials Say

04:08 PM EST, 03/06/2026 (MT Newswires) -- The Federal Reserve should hold its monetary policy steady for "some time" as it seeks evidence that inflation is cooling, Cleveland Fed President Beth Hammack and her Boston Fed counterpart, Susan Collins, said Friday.

In January, the central bank's Federal Open Market Committee left its benchmark lending rate unchanged, citing stabilization in the labor market and elevated inflation. Last year, the Fed delivered three back-to-back 25-basis-point interest rate cuts.

"Under my base case, I think policy should be on hold for quite some time as we see evidence that inflation is coming down and the labor market stabilizes further," Hammack said Friday in remarks prepared for delivery in New York. "But it's easy to envision other scenarios, as well, so I see two-sided risks to rates."

Inflation has been above policymakers' 2% target for the last five years, said Hammack, who is an FOMC voting member this year.

"I see inflationary pressures as broad based," she added. "Tariffs are only one area of concern for businesses, which also report that rising prices for health insurance and electricity are pushing up costs."

Separately, Collins said she will be looking for "clear evidence" that inflation is moving toward the FOMC's target, something she expects might happen over the second half of the year.

"My baseline features a still-uncertain inflation picture, with continued upside risks," Collins said in remarks prepared for delivery at an event in Springfield, Massachusetts. "This, combined with recent evidence suggesting a relatively stable labor market, in my view argues for maintaining policy rates at their current, mildly restrictive levels for some time."

Last month, data showed that the Fed's preferred inflation metric -- measured by personal consumption expenditures and excluding food and energy -- accelerated more than Wall Street's estimates to 3% year over year in December.

Official data showed Friday that US employment unexpectedly fell in February and the jobless rate ticked higher to 4.4%. Collins said the unemployment rate continues to be low by historical standards and has been "relatively stable" over the past few months.

"While hiring could pick up relative to last year's sluggish pace, job gains are likely to remain modest," Collins said. While the US economy is expected to see "solid" growth this year, the ongoing US-Israel war against Iran and other recent geopolitical developments pose considerable uncertainty, she added.

Markets widely expect the FOMC to leave interest rates unchanged at 3.50% to 3.75% later this month, according to the CME FedWatch tool.

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