• Federal Reserve Bank of Atlanta President Raphael Hammack acknowledged that rising gasoline prices are widely felt by consumers.
  • The remarks come as inflation remains sticky, with energy costs adding pressure to household budgets.
  • Hammack's comments suggest the Fed is monitoring energy prices as a factor in future monetary policy decisions.

Hammack on Gasoline Prices

Federal Reserve Bank of Atlanta President Raphael Hammack said on Thursday that "everyone is feeling the increase in gasoline prices," highlighting the broad impact of rising energy costs on American households. Speaking at a conference in Atlanta, Hammack noted that higher pump prices are squeezing consumers and could weigh on spending in other areas of the economy.

"When gasoline prices go up, it's not just a statistic — it's something people see every time they fill up their tank," Hammack said, according to a transcript of his remarks. He added that the Fed is closely watching energy markets as part of its inflation assessment.

The comments come as the national average price for a gallon of regular gasoline has risen to $3.67, up from $3.45 a month ago, according to AAA. The increase has been driven by higher crude oil costs, refinery outages, and geopolitical tensions in the Middle East.

Hammack's acknowledgment of the pain at the pump aligns with recent consumer sentiment surveys that show inflation remains a top concern. The University of Michigan's consumer sentiment index fell sharply in April, with respondents citing higher gas prices as a key factor.

While Hammack did not explicitly signal a change in Fed policy, his remarks underscore the challenge central bankers face as they try to bring inflation down to 2% without choking off economic growth. Energy prices are often volatile and can distort inflation readings, but sustained increases could feed into broader price expectations.

The Fed has kept interest rates steady at 5.25%-5.5% since July, and traders are pricing in the first rate cut in September. However, persistent inflation data could push that timeline further out.

Hammack's focus on gasoline prices also reflects the uneven impact of inflation. Lower-income households and rural communities, which spend a larger share of income on fuel, are particularly vulnerable. "It's important to consider how different groups are affected," he said.

The Atlanta Fed chief declined to comment on the likelihood of a rate cut at the Fed's next meeting in May. He referred to upcoming data, including the personal consumption expenditures price index due out next week, as key inputs for the Fed's decision.

Correction: An earlier version of this article incorrectly stated that Hammack referred to the Consumer Price Index. He referenced the PCE index. This has been corrected.