Fed hawks: Interest rates are not significantly restrictive, stock market valuations are high

Feb. 28 (Xinhua) -- Fed hawk and Cleveland Fed President Mark Hamack said interest rates are not yet significantly restrictive and should remain stable for some time. Or, in other words, we may be close to a neutral environment. Over the long term, the U.S. economy is resilient and will adjust to a higher interest rate environment, with equity market valuations high given broad financial conditions remain accommodative, with equity risk premia near zero. Her remarks clash with comments by Fed Chair Jerome Powell last month. He has said interest rates remain substantially restrictive after last year's rate cut. Hamack also said a patient approach will give us time to monitor the labor market and the trajectory of inflation, as well as the overall economy's 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 Fed's efforts to fight inflation. After his remarks, US stocks extended their losses, with the index falling more than 2.3% in late trading. Hamak is a voting committee member of the FOMC next year.