Written by: Dong Jing, Wall Street Insights

Federal Reserve Cleveland Fed President Beth Hammack has clearly signaled a hawkish stance, stating that relying solely on a single rate hike is insufficient to effectively curb inflation, and achieving the 2% target may require multiple rounds of rate hikes.

In an interview with Yahoo Finance on Monday (August 10), Hammack stated that "the impact of a single 25 basis point hike on the economy may be minimal," thus the number of required hikes "may not be just once." She also indicated that she does not wish to anticipate the specific number of final rate hikes. Hammack noted that the current interest rate level has not imposed a "substantial constraint" on the economy, and she does not believe inflation will naturally fall back to the target level. Hammack is a voting member of the FOMC this year.

This statement further reinforces the market's hawkish expectations for Federal Reserve policy direction. Hammack was one of the three dissenting officials at last month's Federal Reserve meeting, who voted in favor of a rate hike, opposing the decision to maintain the rate unchanged.

Behind the Dissenting Votes: Hammack's Hawkish Stance

Hammack's dissenting vote at last month's Federal Reserve policy meeting has clearly outlined her policy preferences. After the meeting, she warned in a statement that the longer high inflation persists, the harder it will be to push it back to the target level.

This interview marks her first public elaboration on her monetary policy stance following her dissenting vote. Her remarks indicate that her concerns about the current policy stance have not dissipated due to the decision to keep interest rates unchanged.

Hammack explicitly stated that the current interest rate level has not yet imposed a "substantial constraint" on economic activity. This judgment implies that, in her view, the current degree of monetary policy tightening is still insufficient to effectively curb inflationary pressures.

She also emphasized that inflation will not automatically return to the 2% target, which further supports her rationale for advocating for more aggressive rate hikes—if market forces alone cannot achieve the task of cooling inflation, policy tools must play a larger role.

When asked about the extent of rate hikes, Hammack provided directional rather than definitive statements. She indicated that the number of required hikes "may not be just once," but clearly stated that she "does not wish to anticipate specific numbers."