Cleveland Fed President Hammack Warns of Upside Inflation Risks Amid Supply Shocks

• Cleveland Fed President Hammack warns of upside inflation risks.
• Supply shocks and solid demand contribute to elevated inflation.
• Risk of an “inflationary mindset” taking hold due to persistent shocks.

Cleveland Federal Reserve President Beth Hammack indicated on Thursday that inflation in the United States remains elevated, with risks skewed to the upside. Speaking at a conference, Hammack noted that persistent price pressures are supported by solid output demand and present a significant challenge for the central bank’s policy. She emphasized that supply shocks are a notable factor, potentially leading to an “inflationary mindset” if they continue to occur in succession while inflation is already high. Hammack reiterated that price stability is the responsibility of central banks, and the longer inflation stays elevated, the more difficult it becomes to bring it back to target.