Cleveland Fed President Hammack: “Based on My Forecast, We Could be on Hold for Quite Some Time”

In a speech to the Ohio Bankers League, President Hammack described the banking system as the US economy’s secret sauce and highlighted the importance of central bank independence

Federal Reserve Bank of Cleveland President and CEO Beth M. Hammack delivered a new speech, “Recipe for a Thriving US Economy: Strong Banks, Patient Policy, and an Independent yet Accountable Central Bank” at the Ohio Bankers League’s 2026 Economic Summit in Columbus, Ohio.

Key quotes

On monetary policy

“Rather than trying to fine tune the funds rate, I’d prefer to err on the side of patience as we assess the impact of recent rate reductions and monitor how the economy performs. Based on my forecast, we could be on hold for quite some time.”

On maintaining a strong banking system

“We should be mindful that loosening the rules too much could result in less resilient banks that don’t serve the country well in times of stress.”

On Federal Reserve independence

“International evidence shows that countries with less independent central banks usually face higher inflation.”

From the speech

Likening the banking sector to a “secret sauce,” President Hammack described how the nation’s mix of financial institutions provides crucial support to the economy. Tailoring regulation and supervision is one way to ensure the banking system remains safe and sound. Hammack added: “Let’s not water down the sauce to the point that the banking system can’t support the US economy as strongly as it does today.”

Turning to monetary policy, President Hammack noted that both sides of the Fed’s dual mandate have been under pressure as the labor market softened and inflation stayed elevated. Following her vote in support of keeping the federal funds rate steady at 3-1/2 to 3-3/4 percent, she said policy is now in “the vicinity of neutral, meaning it’s not meaningfully restraining the economy.” Looking ahead, she said: “If we see progress on both sides of our mandate, that tells me that our policy rate is already at the right setting and that we should hold it there.”

President Hammack concluded by observing the importance of central bank independence from short-term political pressures. She explained how the Fed’s independence goes hand in hand with its accountability to Congress and the American people: the chair testifies before Congress and all FOMC participants regularly share their monetary policy views with the public.

Read the full speech: Recipe for a Thriving US Economy: Strong Banks, Patient Policy, and an Independent yet Accountable Central Bank

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892