Fed’s Hammack supports gradual rate hikes to manage inflation

Federal Reserve official Beth Hammack has advocated for a gradual approach to rate hikes, suggesting this as the best path forward for monetary policy. Her comments come as the federal-funds target range remains at 3.75%–4.00%, following the Fed’s decision to leave rates unchanged in its most recent meeting. Hammack emphasized that inflation remains above the Fed’s 2% target and suggested that policy should continue to be restrictive, favoring smaller, more frequent rate increases over larger, delayed ones. Key Takeaways Hammack’s comments appear consistent with continued support for gradual rate increases, as she favors smaller, more frequent hikes to manage inflation without causing abrupt market disruptions. Market pricing suggests a possible increase in expectations for at least one rate hike in 2026, as indicated by her support for continued tightening. The news has seen a modest impact on activity, with slight movements in probability for a rate hike in 2026, reflecting Hammack’s influence on perceptions of future monetary policy. What to Watch Market participants will be closely monitoring upcoming inflation data and Federal Reserve statements to gauge potential shifts in mo...