{"id":53786,"date":"2025-09-29T04:38:25","date_gmt":"2025-09-29T08:38:25","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/feds-hammack-projects-prolonged-inflation-battle-restrictive-policy-needed\/53786\/"},"modified":"2025-09-29T04:38:25","modified_gmt":"2025-09-29T08:38:25","slug":"feds-hammack-projects-prolonged-inflation-battle-restrictive-policy-needed","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/feds-hammack-projects-prolonged-inflation-battle-restrictive-policy-needed\/53786\/","title":{"rendered":"Fed&#8217;s Hammack Projects Prolonged Inflation Battle, Restrictive Policy Needed"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li>Cleveland Fed President Beth Hammack expressed significant concern over persistent inflation, forecasting that it will remain above the Federal Reserve&#39;s <strong>2% target<\/strong> for the next <strong>1-2 years<\/strong>.<\/li>\n<li>Hammack indicated that the central bank&#39;s inflation goal will likely not be achieved until <strong>end-2027 or early 2028<\/strong>, citing ongoing price pressures, particularly in the <em>services sector<\/em>, and the potential for tariffs to have a sustained impact.<\/li>\n<li>She stressed the necessity of maintaining a <strong>restrictive monetary policy stance<\/strong> to guide inflation back to target, despite acknowledging a broadly balanced labor market.<\/li>\n<li>US stock futures saw gains, with <strong>Nasdaq 100 futures rising 0.6%<\/strong>, as markets reacted to economic data and other geopolitical developments.<\/li>\n<\/ul>\n<h2>Hammack&#39;s Hawkish Stance on Inflation<\/h2>\n<p>Cleveland Federal Reserve President Beth Hammack voiced strong concerns about the trajectory of inflation, stating that she remains &quot;still worried about inflation&quot; during a recent CNBC interview. She projected that inflation is likely to remain above the Fed&#39;s target for the foreseeable future, specifically for the next <strong>one to two years<\/strong>. Hammack further elaborated that the <strong>2% inflation target<\/strong> is not expected to be met until <strong>late 2027 or early 2028<\/strong>.<\/p>\n<p>The Fed official highlighted persistent inflation pressures, particularly within the <em>services sector<\/em>. She also noted the increasing difficulty in viewing tariffs as merely a one-time impact, suggesting they could contribute to ongoing price increases. Hammack&#39;s remarks underscore a challenging period for monetary policy.<\/p>\n<h2>Maintaining a Restrictive Monetary Policy<\/h2>\n<p>In light of the prolonged battle against inflation, Hammack emphasized the critical need for the Federal Reserve to &quot;maintain a restrictive stance of policy.&quot; She described the current policy as &quot;modestly restrictive,&quot; indicating that the Fed is only a &quot;very small distance to neutral&quot; and must be cautious about removing restrictions too quickly, which could &quot;reinvigorate the inflationary pressures.&quot;<\/p>\n<p>Despite the inflation challenges, Hammack assessed the labor market as looking &quot;broadly in balance&quot; and &quot;near full employment,&quot; with the unemployment rate around <strong>4.3%<\/strong>. However, she anticipates that unemployment may still rise slightly. Her focus remains &quot;squarely on the inflation mandate&quot; as the Fed continues to be challenged on both sides of its dual mandate of price stability and maximum employment.<\/p>\n<h2>Market Reaction and Geopolitical Developments<\/h2>\n<p>In market news, US stock index futures climbed, with <strong>Nasdaq 100 futures up 0.6%<\/strong> and <a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> futures also showing gains. This uptick followed a positive Friday session on Wall Street, influenced by in-line inflation data which fueled expectations for potential interest rate cuts later in the year.<\/p>\n<p>Separately, the EU Council reimposed restrictive measures on Iran. This action follows the activation of the &quot;snapback&quot; mechanism under UN Security Council Resolution 2231 by France, Germany, and the UK, due to Iran&#39;s persistent non-compliance with its nuclear commitments. The reinstated sanctions target Iran&#39;s nuclear and ballistic missile programs, as well as its arms trade.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Cleveland Fed President Beth Hammack expressed significant concern over persistent inflation, forecasting that it will remain above the 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