Cleveland Federal Reserve President Beth Hammack on Thursday doubled down on her push for higher interest rates, arguing that recent inflation data show the central bank remains far from its 2% goal and that policy needs to tighten now.
Speaking in a live CNBC interview from the Fed’s annual symposium in Jackson Hole, Wyo., Hammack pointed to a report released Wednesday showing inflation running around 3% on an annualized basis. Even though monthly price increases have slowed in recent months, she said the Fed should not wait.
“I don’t want to prejudge anything. But I believe now is the time to act,” Hammack said. “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.”
The remarks echo comments Hammack has made in recent weeks and put her firmly on the hawkish side of the Federal Open Market Committee, where she is a voting member this year.
Dissent at July’s FOMC meeting
At the July FOMC meeting, Hammack was one of three dissents against the decision to hold the central bank’s policy rate in a range between 3.5% and 3.75%. The dissenters preferred a quarter-percentage-point hike instead.
Hammack repeated her concern that inaction carries long-term costs. She warned that the longer inflation stays above target, the harder it becomes to bring it back down, and the more pain households and businesses will feel.
“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 said.
Real-world strain on households
Much of this year’s inflation surge has been traced to the Iran war, tariffs, and AI-related demand. While policymakers generally look through supply shocks and other factors considered temporary, some Fed officials worry these effects could become entrenched in the economy.
Hammack offered a ground-level view of that strain, recounting a recent meeting with workers in Erie, Pa. She said they described a sense of despair despite holding good jobs and working every day — still unable to afford small treats like a weekend ice cream cone with their kids.
Despite Hammack’s insistence on acting now, market pricing suggests the Fed will hold rates steady at both its September and October meetings, with the next potential hike not expected until December.
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Source: www.cnbc.com — https://www.cnbc.com/2026/08/27/feds-hammack-says-now-is-the-time-to-act-on-raising-interest-rates.html
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