Cleveland Fed President Hammack Advocates Immediate Action on Inflation, Citing Non-Restrictive Policy
- Hammack: Jackson Hole call for immediate action on 3% inflation.
- Hammack: Rate hikes needed; financial conditions lack restrictiveness.
- Hammack: Waiting risks pain; 2.5% inflation next year at best.
- Hammack: Rates primary tool; job market in balance.
Cleveland Federal Reserve President Beth Hammack stated on Thursday during the Jackson Hole Symposium that “now is the time to act” to contain persistent inflation. She reiterated that current interest rates are not sufficiently restrictive to slow the U.S. economy enough for price pressures to cool independently. Hammack noted that recent inflation data showed an annualized rate around 3%, indicating the central bank remains far from its target. Despite a slowdown in monthly price increases, she stressed the need for tighter monetary policy, asserting that the Fed’s current stance is not providing adequate restriction for the economy. Her remarks echo similar sentiments from other Fed officials, including Kansas City Fed President Schmid [STORY_ID: baa3cef4-1f44-4448-87fa-1a8336936dc7].
Cleveland Fed President Beth Hammack reiterated her call for immediate action, specifying that the Fed needs to act with rate hikes to achieve policy restrictiveness. She warned that waiting will create pain, noting that financial conditions are not restrictive and there is not much restriction in the economy right now. Hammack assessed the job market as broadly in balance and projected inflation to end the year around 3%, not meeting the target, potentially easing to around 2.5% next year at best. She also highlighted that Fed credibility depends on delivering on its dual mandate.
Cleveland Fed President Beth Hammack delivered her remarks at the Jackson Hole Economic Policy Symposium. During her appearance, she discussed the efficacy of both interest rates and the Fed’s balance sheet as economic tools. Hammack specifically characterized interest rates as “the clearest, most transparent, easiest-to-communicate tool” available, further noting their “long history showing the impact of interest rate moves on the economy.” Her comments were made during an interview with Bloomberg’s Tom Keene, Lisa Abramowicz, and Michael McKee.