Cleveland Fed's Hammack: inflation still elevated, risks tilted to the upside

Cleveland Federal Reserve President Beth Hammack said on 24 September that inflation remains elevated and that risks to the inflation outlook are tilted to the upside, Reuters reported, citing Michael S. Derby.

What she said

Speaking while opening a conference at her bank, Hammack argued that the longer inflation persists above the Fed’s goal, the harder and more costly it will be to bring it back to target. She described the inflation outlook as highly uncertain.

Growth and jobs

Hammack characterised US output as growing solidly and said the labour market was near her definition of maximum employment. That framing places less urgency on easing policy for jobs and more weight on containing price pressures, based on her remarks as reported by Reuters.

Context for markets

Her comments came as investors continued to reassess the path of Fed policy after recent strong data. Hammack’s warning about upside inflation risks adds to a series of public Fed speeches that markets use to gauge how willing officials may be to raise rates again.

Limits of one speech

A single regional Fed president does not set policy alone. Markets will still watch forthcoming inflation prints and the next Federal Open Market Committee decisions for confirmation of any shift.