Federal Reserve Bank of Cleveland President and CEO Beth M. Hammack spoke at the Ohio Bankers League’s 2026 Economic Summit in Columbus, Ohio, addressing the current state of monetary policy and the banking sector.
Hammack emphasized a cautious approach to interest rates, stating: “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.”
She also discussed bank regulation, warning against excessive loosening: “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.” Hammack likened the diversity of financial institutions to a “secret sauce” supporting economic strength and 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.”
On monetary policy, Hammack noted pressures on both employment and inflation. After voting to keep federal funds rates 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.’”
Hammack highlighted international evidence showing higher inflation in countries with less independent central banks: “International evidence shows that countries with less independent central banks usually face higher inflation.” She concluded by stressing central bank independence while acknowledging accountability through regular congressional testimony and public communication.
The Federal Reserve Bank of Cleveland operates as one of 12 regional Reserve Banks within the Federal Reserve System. It represents Ohio, western Pennsylvania, eastern Kentucky and northern West Virginia according to its official website. The Cleveland Fed participates in national monetary policy formulation through its president’s role on the Federal Open Market Committee as detailed online.
The bank also supervises financial institutions and supports payment systems for financial stability. It conducts research aimed at promoting economic resilience and mobility for low- and moderate-income communities across its district according to its official website. With headquarters in Cleveland and offices in Cincinnati and Pittsburgh as described online, it provides resources for community development while contributing to optimal economic performance nationwide.
Beth M. Hammack serves as president and chief executive officer of the Federal Reserve Bank of Cleveland according to its official website.
For more information or access to educational resources about economics or banking supervision provided by the Cleveland Fed, visit their official website.
