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Inflation to Stay High Until 2028, Warns Fed Official

9/30/2025

Summary

Hammack Warns Inflation

Beth Hammack of the Cleveland Federal Reserve warned inflation may remain above 2% until late 2027 or early 2028.
The outlook supports a restrictive policy and opposing further rate cuts.
She noted inflation pressures, especially in services, and a 4.00%-4.25% cut.
Hammack described a challenging economy balancing inflation control with job protection.
She warned a government shutdown could slow GDP.

Summary

RBI Holds Rates

Reserve Bank of India (RBI) is expected to hold policy rate at 5.50%.
The RBI remains poised for a surprise cut due to external pressures.
Economists warn United States tariffs could prompt an 'insurance' rate cut.
GDP grew 7.8% in the June quarter, but accuracy concerns persist.
India’s bond market shows no rate-cut expectations, though surprise easing could rally.

History

Historical Context

In 1979, the U.S. faced a severe inflation crisis, with rates exceeding 13%. The Federal Reserve, under Chairman Paul Volcker, raised interest rates to 20% to combat this inflation, significantly impacting economic growth and employment. Today, Beth Hammack's warning of persistent inflation above 2% reflects ongoing challenges as policymakers strive to balance inflation control with job protection, influencing economic stability in the U.S. and beyond.

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Hammack Warns Inflation

Beth Hammack of the Cleveland Federal Reserve warned inflation may remain above 2% until late 2027 or early 2028.
The outlook supports a restrictive policy and opposing further rate cuts.
She noted inflation pressures, especially in services, and a 4.00%-4.25% cut.
Hammack described a challenging economy balancing inflation control with job protection.
She warned a government shutdown could slow GDP.

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