Cleveland Fed President Harker takes a hawkish stance: Inflation is too high, and the labor market is near full employment.

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Cleveland Fed President Beth Hammack stated that, with consumer spending remaining robust and unemployment staying low, persistently high inflation is currently her biggest concern.

Hammack wrote in a LinkedIn article on Friday:

“There is no conflict in our dual mandate. Inflation remains too high, while the labor market is essentially near what I consider to be full employment.”

Hammack’s remarks followed those of Dallas Fed President Lorie Logan, who spoke on Thursday. Logan called for further rate hikes, arguing that inflation does not seem to be consistently moving toward the Fed’s 2% target. Both Hammack and Logan hold monetary policy voting rights this year on the Federal Open Market Committee (FOMC).

Hammack said she has recently heard widespread concerns about price pressures from businesses and community members, covering areas such as energy costs, supply chain disruptions, rising insurance premiums, and the artificial intelligence boom.

Having taken up the role of Cleveland Fed President nearly two years ago, Hammack said:

“This is the first time since taking office that I’ve heard businesses say they believe we need to take action to curb inflation; and it’s also the first time I’ve heard from some struggling consumers expressing increasingly deep despair. I keep an open mind every time I attend an FOMC meeting, with only one goal—to achieve the best outcome for the American people.”

An increasing number of Fed officials have recently warned that if inflation does not continue to fall toward the 2% target, the central bank may soon need to raise interest rates again. The Fed’s latest economic forecast released in June shows that half of the 18 policy makers expect at least one more rate hike this year, each of 25 basis points; a few officials believe there was already reason to raise rates last month.

Fed officials will hold the next FOMC monetary policy meeting in Washington July 28–29.

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