Federal Reserve Hike: Inflation May Not Reach Target Until 2028, Policy Needs to Remain Restrictive

BlockBeats News, September 29th, Cleveland Fed President Beth Hammack stated that inflation may remain above the target level until 2028, which is a key reason she opposed a rate cut. The policymaker, in an interview with CNBC in Frankfurt, pointed out that the Fed has not achieved its 2% inflation target for over four and a half years and may still not meet it in the near future.

"I continue to observe that there is pressure on both overall inflation and core inflation, and what particularly concerns me is the pronounced issue of service sector inflation," Hammack said. "My prediction is that in the next one to two years, inflation may still be above the target. It may not really fall back to the 2% target level until the end of 2027 or early 2028."

Although many Fed officials acknowledge that the current impact of tariffs on prices is relatively modest, Hammack remains cautious and says she does not agree with some colleagues who view the tariff impact as a "one-off shock." "From an inflation perspective, I am still concerned about the current situation," she said. "I believe that our policy indeed needs to maintain a restrictive stance." (Golden Finance)