The Federal Reserve Bank of Cleveland's President, Beth M. Hammack, has shared insights regarding her vote at the recent Federal Open Market Committee (FOMC) meeting held on December 17-18, 2024. The statement highlights the current economic conditions and the decision-making process behind monetary policy.

"The US economy is in a good position, but there is more work to do on inflation," Hammack stated. She noted that while economic growth has been strong and the labor market healthy, inflation remains elevated despite significant progress since its peak in 2022. "Monetary policy has played an important role in bringing PCE inflation down considerably from its peak of 7.2 percent in the summer of 2022."

Hammack emphasized the importance of maintaining focus on reducing inflation to 2 percent promptly. "Given the health of the labor market, it is important to maintain the focus on returning inflation to 2 percent in a timely fashion." To achieve this goal, she believes that monetary policy should remain modestly restrictive for some time.

She explained her preference for holding steady with the federal funds rate target range at 4-1/2 to 4-3/4 percent during December's meeting. This decision was based on recent economic data strength and her forecast that inflation would stay above 2 percent over the next year amid a robust labor market.

Hammack acknowledged that her decision was not easy and appreciated the diverse perspectives within FOMC discussions: "I viewed my own decision as a close call, and I appreciate the diverse perspectives that my FOMC colleagues brought to our robust discussion." She looks forward to continued collaboration with her colleagues as they strive toward their dual mandate objectives of maximum employment and price stability.