Cleveland Federal Reserve President Beth Hammack has indicated that persistently high inflation is her greater concern at present, given that consumer spending remains robust and the unemployment rate is staying low.
Hammack wrote in a post on LinkedIn on Friday:
"Our dual mandate is not in conflict. Inflation remains too high, and the labor market is essentially near what I consider to be full employment."
Hammack's remarks follow closely on the heels of comments from Dallas Fed President Lorie Logan on Thursday. Logan called for further interest rate increases, arguing that inflation does not appear to be on a sustained path back toward the Fed's 2% target. Both Hammack and Logan hold votes on monetary policy at the Federal Open Market Committee (FOMC) this year.
Hammack stated that she has recently heard widespread concerns about price pressures from business and community leaders, covering areas such as energy costs, supply chain disruptions, rising insurance premiums, and the artificial intelligence boom.
Hammack, who took up the role of Cleveland Fed President nearly two years ago, said:
"This is the first time in my tenure that I've heard businesses say they believe we need to act to curb inflation; and the first time I've heard some consumers, who are struggling to make ends meet, express a deepening sense of despair. I come to every FOMC meeting with an open mind and a single goal—to achieve the best outcome for the American people."
A growing number of Fed officials have recently warned that if inflation does not continue to move back toward the 2% target, the central bank may soon need to raise interest rates again. The Fed's latest economic projections released in June showed that half of the 18 policymakers anticipate at least one more 25-basis-point rate hike this year; a minority of officials believed the case for a hike was already present last month.
Fed officials will convene for their next FOMC monetary policy meeting in Washington from July 28th to 29th.
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