Fed’s Beth Hammack Warns Trump’s Trade Turmoil Has Companies Rethinking Investment, Hiring Plans

Cleveland Federal Reserve President Beth Hammack said Thursday that businesses are delaying investment and hiring decisions amid heightened uncertainty surrounding President Donald Trump’s new tariff policies.

“The uncertainty is really weighing on them,” Hammack told CNBC. “It’s creating issues for them in terms of planning, in terms of where they’re going to go.”

She noted that some companies have paused capital spending decisions, particularly those related to new facilities or long-term investments, until there is greater clarity around the direction and durability of U.S. trade policy.

“I think everyone is trying to work through what the implications of these tariffs and policies are going to be — how significant the tariffs are, how long they’re going to stay in place,” Hammack said. 

“If you’re looking at building a new facility or plant to bring production back to the U.S., you need to have confidence that those policies are going to be in place for a long period of time.” 

In addition to investment delays, companies are also reevaluating their hiring strategies. Hammack said firms are evaluating whether they have the right labor force and how long they can retain employees in the event of potential business disruptions.

She added that the labor market remains resilient in part because of lingering caution from the pandemic. “They’re really holding onto them as much as they can, and that may help support the labor market as we’re moving forward.”

On monetary policy, Hammack said the Fed can afford to be deliberate about any rate changes. “It’s a good moment for us to take our time,” she said, explaining that the Fed will move quickly if it needs to, but the hard data isn’t showing it yet.

“I think it’s too soon. We need to be patient. This is a time when we want to be sure we’re moving in the right direction—not too quickly in the wrong one,” she said.

U.S. stocks were mixed in Thursday morning trading as investors continued to focus on developments in global trade policy.

The SPDR S&P 500 ETF Trust (SPY) edged 0.4% higher, while the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, rose 1.1%, led by strength in technology shares. The SPR Dow Jones Industrial Average ETF (DIA) underperformed, slipping 0.3%, dragged down by an 8% decline in IBM shares.

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