Federal Reserve hawks: Interest rates not significantly restrictive, high stock market valuations

According to a report by Golden Finance, hawkish officials from the Federal Reserve and Chairman of the Cleveland Fed, Hammack, stated that interest rates have not yet shown significant restrictions and should remain stable for a period of time. Or, in other words, we may be approaching a neutral environment. In the long run, the US economy is resilient and will adapt to a higher interest rate environment, given the loose financial environment and high stock market valuations, with stock risk premiums close to zero. Her remarks conflict with those made by Federal Reserve Chairman Powell last month. He has stated that interest rates still have substantial limitations after last year's interest rate cuts. Hamak also stated that a patient approach will give us time to monitor the labor market and inflation trajectory, as well as the overall economic performance in the current interest rate environment. It is important to monitor inflation expectations and other indicators to assess whether financial conditions are in line with the Federal Reserve's efforts to combat inflation. After his speech, the US stock market expanded its decline, with the Nasdaq falling more than 2.3% in late trading. Hamak is the FOMC voting committee member for next year.