• Cleveland Fed President Beth Hammack declares inflation remains too high and is trending upward
  • Hammack assesses current monetary policy as 'barely restrictive, if at all' following recent rate cut
  • The hawkish stance signals deepening divisions within the Federal Reserve on policy path

Cleveland Federal Reserve President Beth Hammack delivered a stark warning about persistent inflation pressures Thursday, explicitly opposing the central bank's recent quarter-point rate cut and declaring current policy insufficient to combat rising prices.

Speaking at The Economic Club of New York, Hammack stated, 'I remain concerned about high inflation and believe policy should be leaning against it,' directly challenging the Fed's decision to lower rates to the 3.75%-4.00% range. Her comments represent the most forceful pushback yet against the central bank's recent easing move.

The inflation picture remains troubling, with Hammack noting that PCE inflation stood at 2.7 percent in August while core PCE inflation excluding food and energy was 2.9 percent. More concerning, core services inflation excluding housing remained elevated at 3.4 percent in August, essentially unchanged from 3.6 percent a year earlier.

'Inflation has been running above our 2 percent objective for the last four and a half years and is not a purely transitory phenomenon,' Hammack told the audience. Her base case projects PCE inflation rising to approximately 3 percent by year-end 2025 and remaining elevated through much of 2026.

A central concern for Hammack is the restrictiveness of current monetary policy. She assessed that existing policy is 'barely restrictive, if at all,' with the recent rate cut bringing the policy rate to approximately the neutral rate—the level that neither stimulates nor restrains the economy. This means current policy provides minimal downward pressure on inflation despite the Fed's efforts.

The hawkish stance signals potentially deepening divisions within the Federal Open Market Committee about the appropriate policy path forward. Hammack had previously opposed the October 31 rate cut and stated in an August interview that she would not support rate cuts, citing that 'We have inflation that's too high.'

Multiple inflation drivers complicate the policy calculus. Hammack noted that tariff changes have been large, dynamic, and ongoing, contributing to inflation pressures. However, some inflation measures relatively unaffected by tariffs remain elevated, suggesting broader inflationary pressures beyond trade policy.

On the labor market front, Hammack observed that conditions have softened but remain generally healthy, with the unemployment rate close to her estimate of its long-run level. She expects continued gradual cooling in the job market with downside risks.

The December 10th FOMC meeting now looms as a critical juncture for determining whether Hammack's hawkish view gains consensus support or represents a minority position within the Fed. Markets will closely scrutinize every statement from Federal Reserve officials and economic data, particularly inflation and employment reports, to gauge the Fed's future direction.

Hammack remains firmly committed to achieving the 2 percent inflation objective in a timely fashion, arguing that policy should limit the duration of persistent misses to prevent consumers, businesses, and markets from doubting the Fed's commitment to price stability.

Correction: An earlier version of this article misstated the timing of Hammack's comments. They were delivered on November 6, 2025.