- Tariffs are a big part of the inflation story
- Services part of inflation has remained elevated, and this is concerning
- Starting to see emerging signs of fragility in the labor market
- I expect 2% inflation in 2027
- Something is changing in the labor market
- Job market is still in low hiring, low firing environment
- Inflation expectations anchored but there are some signs of worry
- Inflation is a greater concern to me than employment
- Will be open minded about economy's performance
- Restrictive monetary policy needed to cool inflation
Hammack is the most hawkish FOMC member. She will be a voter next year. She's not deviating from her prior comments here as she continues to place greater weight on inflation than labour market.
The core of the FOMC is wary of inflation risks but they were "forced" to move towards neutral because of the weaker labour market data. That means that if we were to start seeing improvements in the labour data, the Fed might switch its focus back to inflation, especially if it continues to rise.
