Beth Hammack, President of the Federal Reserve Bank of Cleveland, estimates the real neutral interest rate between 1.4% and 1.5%, positioning herself at the upper end of the FOMC range compared to the committee’s median projection of around 3% nominal. She argues that the current federal funds rate of roughly 3.5% to 3.75% may be stimulating rather than restricting economic activity, meaning monetary policy could be more accommodative than assumed. At the July 2026 FOMC meeting, Hammack dissented by voting in favor of an immediate rate hike to address inflation remaining stubbornly above the Fed’s 2% target. She suggested that more than one 25 basis point increase could be necessary to steer inflation back toward target.
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