The hawkish signal is back! Cleveland Fed Chairman Hamak Says Inflation Is Still a Major Concern

The Zhitong Finance App learned that Cleveland Federal Reserve Chairman Beth Hammark said that in a context where consumer spending remains resilient and the unemployment rate is still low, continuing high inflation is an issue she is more concerned about right now.

Hamak wrote in a LinkedIn post on Friday: “There is currently no conflict between the dual missions of the Federal Reserve. Inflation is still too high, and the labor market is roughly near what I think of full employment.”

Hamak's latest statement continues the hawkish signals recently released by a number of Federal Reserve officials. Dallas Federal Reserve Chairman Logan said on Thursday that current inflation does not seem to continue to fall back to the Fed's target level of 2%, so it is necessary to further raise interest rates.

Both Hamack and Logan have the right to vote on monetary policy in the Federal Open Market Committee (FOMC) this year.

Hamak said she recently heard widespread concerns about price pressure from business and community leaders, covering various aspects such as energy costs, supply chain disruptions, rising insurance costs, and increased spending due to the AI boom.

She said, “This is the first time since I took office that I have heard an initiative from a company that the Federal Reserve needs to take action to contain inflation; at the same time, some consumers who are struggling to make a living on a daily basis are also showing a growing sense of hopelessness.”

Hamak became the chairman of the Cleveland Federal Reserve almost two years ago. She stressed that she would attend every FOMC meeting with an open mind, with the sole goal of achieving the most favorable outcome for the American people.

Recently, more and more Federal Reserve officials have warned that if inflation fails to continue falling back to the 2% target, the Fed may soon need to raise interest rates again.

According to the latest economic forecast released by the Federal Reserve in June, half of the 18 policymakers expect to raise interest rates at least once this year, with a margin of 25 basis points each time; a few other officials believe that the Federal Reserve already had reasons to raise interest rates at last month's meeting.

Federal Reserve officials will hold the next monetary policy meeting in Washington from July 28 to 29. At that time, inflation trends, consumer resilience, and labor market conditions are expected to continue to be the focus of policy discussions.