Beth Hammack, President of the Cleveland Federal Reserve Bank, explained why she cast a dissenting vote at this week's interest rate meeting, stating that interest rates should be kept stable until more progress is made in reducing inflation.

Hammack stated that she believes interest rates are close to a neutral level that neither hinders nor stimulates the economy, and suggested that rates should remain elevated enough to moderately limit economic activity for "a period of time."

In a statement released on Friday, Hammack wrote, "Based on my assessment, monetary policy is not far from a neutral stance, and I prefer to keep policy unchanged until we see further evidence that the inflation rate is once again falling back to our 2% target."

Hammack joined the Federal Reserve in August and has participated in three votes so far. She indicated that while the economy is "in good shape," there is still more work to be done to alleviate price pressures. The Federal Reserve will cut rates for the third consecutive time at its meeting on December 17-18.

Although policymakers lowered rates again this month, they hinted that due to the slow process of bringing inflation down to the central bank's 2% target, they may significantly slow the pace of rate cuts next year.

"Inflation remaining above 2% for too long could lead to a de-anchoring of inflation expectations, making it more difficult for the inflation rate to return to our target level," Hammack wrote.

Federal Reserve Chairman Powell stated at the post-meeting press conference that further rate cuts would only occur if inflation data cools.

Hammack worked at Goldman Sachs for 30 years before joining the Federal Reserve, engaging in finance, Capital Markets, and risk management. She is the first regional Fed president to voice dissent since 2022, following Federal Reserve Governor Michelle Bowman's dissenting vote in the September meeting.