Fed's Hammack says Iran war's end won't stop economic disruption

Investing.com -- Federal Reserve Bank of Cleveland President Beth Hammack said Tuesday that economic disruptions will persist for months even if the Middle East war ends soon.

Hammack told reporters after a speech in Cleveland that business contacts in the energy sector indicated the Strait of Hormuz would require significant time to restore oil flows. She said the reopening of the strait would take months to rebuild normal operations, creating ripple effects across the economy.

The Fed official said inflation remains too high and continues rising, which is her primary concern. She noted that inflation expectations have not yet shown signs of increasing.

Hammack said the job market remains stable despite weak job creation, with the unemployment rate serving as the best single indicator of labor market conditions. She described the job market as roughly balanced.

The Cleveland Fed president said economic uncertainty is elevated, making the policy outlook uncertain. She expects the next Federal Open Market Committee meeting will feature substantial debate.

Hammack said firms have demonstrated resilience amid considerable change. She noted that higher-income Americans continue performing well economically, while lower-income households face difficulties.

The Fed official said that the war's impact on consumer spending has not yet materialized.

Hammack said she hears both positive and negative perspectives regarding tariffs. She noted that Fed Chair Kevin Warsh is approaching his role with an open mind and asking numerous questions.

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