By Michael S. Derby

(Reuters) -Federal Reserve Bank of Cleveland President Beth Hammack warned Thursday that cutting rates further right now carries a wide range of risks for the economy.

Given the persistence of inflation running over the Fed’s 2% target, “lowering interest rates to support the labor market risks prolonging this period of elevated inflation, and it could also encourage risk-taking in financial markets,” Hammack said, according to the text of a speech to be presented at a conference held by her bank.

Hammack noted that financial conditions were “quite accommodative today” amid stock price gains and “easy” credit conditions, explaining that making credit even cheaper in these conditions “could support risky lending”.

HAMMACK OPPOSED OCTOBER CUT

Fed-engineered drops in

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