Fed's Hammack Warns Rate Hike May Be Needed Soon as Inflation Persists

Cleveland Federal Reserve President Beth Hammack said on June 2, 2026, that the U.S. central bank may need to tighten monetary policy “soon” if inflation does not abate, stressing that price pressures risk becoming entrenched above the 2% target. “Inflation is too high and is moving higher,” Hammack said in a speech, pointing to broad-based pressures across goods and nonhousing services. She cited rising energy costs due to the U.S.-Israeli conflict with Iran, along with higher electricity, health insurance, and software prices. The Fed is expected to hold its benchmark rate at 3.5%-3.75% at the June 16-17 FOMC meeting, but interest rate futures are pricing in a hike later in the year. Hammack, a voting member this year, said keeping rates steady now is reasonable given economic uncertainty. However, she warned that waiting for definitive proof of persistent inflation could require larger, more costly policy adjustments. The economy remains resilient with a jobless rate near full employment, and financial conditions are supportive of growth, not restrictive, she added.