Beth M. Hammack, President of the Federal Reserve Bank of Cleveland and a voting member of the Federal Open Market Committee (FOMC) in 2026 through one of the rotating regional president seats, said she expects monetary policy will need to move to a restrictive stance to bring inflation back to 2 percent in a timely manner.
She backed that call with the calendar: inflation has run above the Fed’s goal for nearly six years, and the pressures she sees are relatively broad based, reflecting both supply and demand. Hammack prefers to get to that stance through more frequent, smaller adjustments, which she said would disrupt households, businesses and financial markets less and reduce the risk of policy falling behind and an inflationary mindset taking hold.
Turning to the dollar, she tied its international status to the qualities that give any currency a solid foundation, including central bank independence, which lets the Fed deliver on its mission. A reserve currency also has to be available in deep, liquid markets, she added, so investors can move in and out as they see fit.
The Fed’s independence, paired with its accountability to Congress, anchors the world’s confidence in its commitment to 2 percent inflation, a link that ties the inflation fight directly to the dollar’s standing. She also pushed back on digital alternatives, noting that price volatility makes cryptocurrencies a less certain store of value than the dollar.
Monetary Policy
“I expect that monetary policy will need to move to a restrictive stance to bring inflation back to 2 percent in a timely manner.”
“I prefer getting to that stance through more frequent smaller adjustments when possible, something which would be less disruptive to households, businesses, and financial markets. This strategy would also reduce the risk of having policy fall behind where it needs to be and an inflationary mindset take hold.”
Inflation
“Inflation has now been above our goal for nearly six years, and the pressures I’m seeing appear to be relatively broad based, reflecting both supply and demand.”
Dollar’s International Status
“The dollar’s status depends on preserving the fundamental qualities that underlie its strength, qualities that provide a solid foundation for any currency. This includes maintaining central bank independence so we can deliver on our mission.”
“A reserve currency has to be more than trusted. It has to be available, in deep and liquid markets, so that investors can choose to move in and out of the currency as they see fit.”
“The Fed’s independence, along with its accountability to Congress, is critical to maintaining the world’s confidence in our commitment to 2 percent inflation.”
“Delivering on our commitments is an important way the Federal Reserve helps the dollar remain a reliable store of value and that Americans can continue to reap the benefits of its global status.”
Digital Currencies
“The price volatility of cryptocurrencies makes them a less certain store of value than the dollar.”