Beth M. Hammack, President of the Federal Reserve Bank of Cleveland and a voting member of the Federal Open Market Committee (FOMC) in 2026 under the regional rotation, delivered a pointed hawkish message on rates in an interview with Bloomberg at the Jackson Hole Symposium, declaring that it's time for the Fed to act with rate hikes and warning that delay will create pain.
She grounded the call in her read of financial conditions, saying she doesn't see much restriction in the economy right now, a signal that, in her view, current policy isn't doing enough to slow activity.
Inflation adds weight to that argument: Hammack expects price growth to finish the year around 3%, still short of the Fed's target.
On the tools available to policymakers, she called interest rates the Fed's most easily understood lever, though she admitted the central bank still doesn't fully grasp how the balance sheet feeds through to the broader economy.
Hammack was just as direct about the Fed's public role, stressing that communicating with the public is part of the job and that markets complement the Fed without ever substituting for it. Even with the hawkish tilt, she said she'll walk into every FOMC meeting with an open mind.
Key Quotes
Monetary Policy
It's time for the Fed to act with rate hikes; waiting will create pain.
Will go into all Fed meetings with an open mind.
Interest rates are the Fed's most easily understood tool.
Financial Conditions
There is not much restriction in the economy right now.
Inflation
Inflation will end the year around 3%, not meeting the target.
Balance Sheet
Don't really know a lot about the balance sheet's effects on the economy.
Fed Transparency & Accountability
Communicating Fed issues to the public is part of the job.
Markets complement the Fed but aren't a substitute for the Fed.