The president of the Federal Reserve Bank of Cleveland tells community members she is “laser-focused” on inflation because people need stable prices in order to plan for the future.
The president of the Federal Reserve Bank of Cleveland told community members this week that she is “laser-focused” on inflation because people need stable prices in order to plan for the future.
Beth Hammack, the president of the Fed’s Fourth District, said she and her staff meet with consumers and businesses throughout the district, which includes all of Ohio as well as parts of Kentucky, West Virginia and Pennsylvania.
In a session moderated by Signal Cleveland Editor-in-Chief Lila Mills, Hammack said she wants to learn what’s going on in the region’s economy and how businesses are faring as they address pressures on everything from pricing to finding talent.
The region, she said, with its manufacturing, healthcare, education, farming and other sectors, is “really a microcosm.”
‘We really are in a two-speed economy’
Right now, she said, employment is pretty stable, but “We really are in a two-speed economy,” meaning lower-income people are struggling to pay for essentials such as food and housing while higher-income people are doing OK.
Hammack gave a specific example related to grocery bills: People who used to buy very lean ground beef are now buying less expensive versions. Watching such trends, she said, helps Fed officials understand the economy.
The Fed has a dual mandate, she said – to maximize employment and promote price stability. She is particularly concerned about inflation. She noted that the Consumer Price Index was 2.9% for 2024, nearly a full percentage point higher than the Federal Reserve’s target of 2%.
Closely watching latest rate cut
The Fed’s primary tool for keeping inflation in check is interest rates. President Donald Trump has been pushing the Fed to cut rates, which it did by a quarter of a percentage point on Sept. 17. In theory, lower interest rates will boost hiring, spending and economic activity in general. But lower interest rates can also boost inflation.
Hammack, who became president of the Cleveland Fed in August of 2024 after 30 years at Goldman Sachs, said she and her colleagues are keeping a close eye on how the economy responds to the recent rate cut.
Hammack’s conversation with Mills was part of the Fed Talk Speaker Series, which aims to connect the Cleveland Fed, one of the Federal Reserve’s 12 regional banks, with residents to discuss the economy. The event was livestreamed but also presented in person to more than 100 people.
After the talk, community members were able to tour parts of the Cleveland Fed’s headquarters building at East 6th Street and Superior Avenue downtown.
