Federal Reserve official Beth Hammack has defended gradual rate increases as the best path forward for monetary policy. The federal-funds target range remains at 3.75%–4.00%, following the Fed’s decision to leave rates unchanged at its most recent meeting. She said inflation remains above the Fed’s 2% target and monetary policy should remain restrictive, favoring smaller, more frequent increases over larger, delayed hikes. Market pricing now suggests the possibility of at least one rate hike in 2026, with participants closely watching upcoming inflation data and statements from members of the Federal Open Market Committee. Significant changes in economic indicators or inflation could alter these expectations.
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