Federal Reserve Bank of Cleveland President Beth Hammack said on Wednesday that U.S. inflation is likely to reach approximately 3% by the end of 2026, with a gradual decline toward about 2.5% in 2027.
Speaking in an interview with Fox Business, Hammack noted that the central bank’s preferred inflation gauge rose 3.7% annually in July, still above the Fed’s 2% target. She reiterated that achieving the target will likely extend into next year, though recent data align with her expectations.
Hammack emphasized the need for restrictive monetary policy to address persistent inflationary pressures. She also highlighted that the labor market remains broadly balanced, providing limited additional pressure on prices. The Fed’s policy stance, she said, must stay restrictive to ensure inflation continues trending downward.
Addressing the timing of future decisions, Hammack stated she approaches each Fed meeting with an open mind and retains flexibility on the pace and timing of policy adjustments. Her remarks underscore ongoing uncertainty about the inflation trajectory despite recent progress.
