The head of the Federal Reserve Bank of Cleveland said she is concerned about inflation and anticipates it remaining an issue for the next couple of years.

“I’m really worried about what’s going on with inflation,” Beth Hammack, the Cleveland Fed’s president and CEO, said during a Monday discussion at the reserve bank.

The inflation rate for nearly the past five years is 3%, when the Fed’s target is 2%, Hammack said.

“I have a lot of concern about the level of inflation and the persistence of inflation,” she said, adding, “My forecast and many other professional forecasts would tell you that we’re likely to see inflation continue to go up so we’re high and we’re running in the wrong direction.”

Hammack said the national unemployment rate of 4.3% is “pretty healthy” and “right around most estimates of that maximum employment number.”

But, Hammack said, “There’s some signs of fragility in the labor market.”

That’s because businesses aren’t hiring and people aren’t leaving their jobs, she said.

“It’s really hard to get a job if you’re a recent college graduate,” Hammack said. “If you’re in that 16-to-24-old age range, it’s harder to find a new job because people aren’t leaving their jobs.”

The economic climate is causing those in the lower and middle income brackets to really struggle, Hammack said. Those making $22 an hour can’t keep up with expenses, she said,

“They’re having a hard time figuring out how to feed their families, how to find housing that’s going to be safe and reliable,” Hammack said. “We hear constantly about individuals trading down. Most of the families that are struggling are working families.”

The Fed last week reduced interest rates by 0.25% – the first reduction this year. Hammack didn’t get a vote in that reduction. Hammack votes in 2026 on the Fed’s policy decisions.

“We should be very cautious in removing monetary policy restriction,” she said Monday. “It worries me that if we remove that restriction from the economy, things could start overheating again.”

She added: “If we remove that restriction too quickly, yes, it may help on the labor side, but I feel like the labor side is still in pretty good shape.”

Hammack said: “I’m really worried about what’s going on with inflation.”

Regarding tariffs, Hammack said many businesses are absorbing those costs because they purchased a lot of inventory earlier this year. That’s when President Donald Trump started talking about raising tariffs and then implemented policy.

But businesses may no longer be able to absorb those increases, she said.

“We could see another wave of pricing increases that are happening in the first and second quarters of next year,” Hammack said. “That’s something we need to continue to watch.”

The Cleveland Fed is one of 12 regional reserve banks in the Federal Reserve system. The Cleveland Fed’s district includes all of Ohio, western Pennsylvania, eastern Kentucky and northern West Virginia.

Hammack has served as its president and CEO since Aug. 21, 2024.