Federal Reserve Bank of Cleveland President Beth Hammack said on Thursday that the U.S. central bank may need to raise interest rates sooner rather than later, given that inflation remains above the Fed’s 2% target.
Hammack, speaking to CNBC, reiterated her view that the current economic backdrop supports further tightening, though she cautioned against preempting the Fed’s next policy decision. The central bank’s benchmark rate has been held in a range of 3.50% to 3.75% since the Federal Open Market Committee’s meeting at the end of July.
While Hammack did not specify a timeline for action, she emphasized that the persistence of elevated inflation justifies consideration of additional tightening. She previously voted in favor of a rate hike at the July meeting, where policy was ultimately kept unchanged.
The Fed’s next scheduled policy meeting is still several weeks away, leaving room for further data-dependent adjustments. Hammack’s remarks underscore ongoing debate within the central bank over the appropriate pace of monetary tightening amid mixed signals on economic growth and price stability.
