Cleveland Fed's Hammack Warns of Elevated Inflation Risks

Beth Hammack, CEO of the Federal Reserve Bank of Cleveland and voting member of the Federal Open Market Committee, believes that inflation risks are skewed towards the upside. In her opening remarks at the 'Inflation: Drivers and Dynamics Conference 2026', she stated that 'the longer that high inflation persists, the more challenging and costly it can be to bring it back down'. Hammack emphasized the importance of distinguishing between temporary and persistent changes in inflation using reliable methods.

The conference, hosted by the Center for Inflation Research at the Federal Reserve Bank of Cleveland and the European Central Bank, focuses on understanding the dynamics of inflation. According to Hammack, 'inflation expectations are central in models of inflation dynamics', and monetary policy aims to keep those expectations anchored at levels consistent with the 2% target.

Hammack's comments highlight the uncertainty surrounding inflation, with risks tilted towards the upside. Her remarks also underscore the need for accurate forecasting and reliable methods to assess changes in inflationary pressures.