Cleveland Fed President Beth Hammack said the Federal Reserve’s dual mandate objectives are generally aligned, and she did not describe current monetary policy as restraining the broader economy. She said the main area showing restraint is housing, while persistently high inflation carries real economic costs and puts pressure on wages. Hammack also said high inflation complicates economic planning and described inflation expectations as reasonably well anchored.
Economic Outlook and Inflation Dynamics
On financial markets, Hammack said rising bond yields reflect multiple forces, including a stronger economic outlook alongside reactions to Fed and wider government policy. She also said demand for investment linked to AI is competing for capital in the bond market, while longer-term questions remain over how AI could affect inflation. Separately, she said the US is on an unsustainable fiscal path, and added that, while she is mindful of financial conditions, the Fed is the decision maker on monetary policy.
