Cleveland Federal Reserve President Beth Hammack reiterated her call for an immediate interest rate increase on Thursday, arguing that the latest inflation data shows the Fed remains far from its target. During a live interview at the Jackson Hole central bank symposium in Wyoming, Hammack emphasized that despite a recent slowdown in monthly price gains, policy tightening is still necessary.

"I don't want to prejudge any outcome, but I believe it's time to act now," Hammack stated. "Inflation has been above target for over five years, persistently running at elevated levels. After assessing financial conditions and engaging with market participants, I believe current policy is not restrictive enough."

This stance aligns with Hammack's recent series of remarks. As a voting member of the Federal Open Market Committee (FOMC) this year, she was one of three dissenting votes at the July meeting, where the committee decided to hold the policy rate in the 3.5%-3.75% range. Hammack and the other two dissenting officials favored a 25-basis-point hike.

Hammack expressed concern that inflation continues to erode household budgets, necessitating further Fed action. "The longer inflation stays above target, the harder it becomes to bring it back, and the more pain businesses and families will endure," she said. "In my view, the real risk of inflation deviating from target for an extended period is that the public will gradually form expectations of high inflation."

The recent upward pressure on inflation largely stems from the Iranian conflict, tariff policies, and demand expansion driven by artificial intelligence. While policymakers typically ignore disruptions from temporary supply shocks, some Fed officials worry these effects could become entrenched in the economy.

Hammack noted her recent visits with workers in Erie, Pennsylvania, saying, "People are expressing frustration. They work hard every day, have decent jobs, yet still feel they can't make ends meet—even struggling to buy their kids an ice cream on the weekend."

Despite Hammack's hawkish stance, market pricing indicates the Fed is likely to hold rates steady at its September and October meetings, with the next potential rate hike not expected until December.