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Investing.com -- Federal Reserve Bank of Cleveland President Beth Hammack said Wednesday that interest rates are currently at an appropriate level and the central bank is likely to remain on hold for some time, though she acknowledged risks could push policy in either direction.
"I think that rates are in a good place," Hammack said on CNBC. "My baseline is that we're going to remain on hold for a good while, but I do think that there's two-sided risk to rates."
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Hammack noted that future policy adjustments could go either way depending on incoming economic data. "There's risk that we might need to be more accommodative or more restrictive, depending on how the data comes out," she said.
The Cleveland Fed president highlighted energy prices as a key factor to watch, stating that high energy costs could both fuel inflation and weigh on economic growth. She emphasized that the duration and magnitude of elevated energy prices will be critical factors in determining their economic impact.
Hammack said the job market appears reasonably balanced and does not currently represent a source of inflationary pressure. She added that inflation expectations look reasonably well contained, though she noted the Fed has been missing its inflation target for five years and consumers have faced an extended period of elevated inflation.
"Supply shocks are tricky for monetary policy," Hammack said, describing the current environment as a tough time for Fed policymaking.
On other topics, Hammack said it remains unclear what artificial intelligence will do to the economy. She also stressed the importance of Fed independence and said she is focused on doing her job amid threats to the central bank.