Cleveland Federal Reserve President Beth Hammack is renewing her push for higher interest rates, arguing the central bank remains too far from its inflation goal.
Speaking from the Fed’s annual symposium in Jackson Hole, Wyoming, Hammack pointed to a report showing inflation running at around 3% on an annualized basis as evidence that action is needed.
“I don’t want to prejudge anything. But I believe now is the time to act,” she said in a live interview at the symposium.
Hammack added that persistent inflation has become a deep structural concern, not simply a short-term fluctuation that policymakers can afford to wait out.
“I believe that we’ve been in an inflationary situation for more than five years. It’s been running well above our target. I don’t see any restriction in policy when I look at financial conditions and when I talk to market participants,” she said.
Her comments align with a dissenting vote she cast at the July meeting of the Federal Open Market Committee, where she is a voting member this year.
Hammack was one of three dissenters who pushed for a quarter percentage point rate hike rather than the committee’s decision to hold the policy rate in a range between 3.5% and 3.75%.
She warned that allowing inflation to persist above the Fed’s objective for too long risks changing how the public thinks about prices in a lasting way.
“The longer inflation stays above our objective, the harder it will be for us to bring it back down, and the more pain that individuals and businesses are going to be experiencing,” she said.
Hammack also cautioned that an entrenched inflation mindset among consumers and businesses could make the Fed’s job significantly more difficult going forward.
“To me, the real problem with us missing on our inflation objective for so long is the risk that an inflationary mindset starts to set in with the public,” she added.
Much of this year’s price pressure has been linked to the impact of the Iran war, tariffs, and demand driven by artificial intelligence investment, factors some officials worry could become embedded in the broader economy.
Hammack described meeting workers in Erie, Pennsylvania, who “were all saying that they’re feeling a sense of despair. They’re working every day, coming in, they’ve got good jobs, and yet they still feel like they can’t make ends meet. They can’t go and afford an ice cream cone on the weekend with their kids.”
The human toll of sustained inflation, she suggested, reinforces why the Fed cannot afford to remain passive while prices continue to strain household budgets across the country.
