Federal Reserve officials continued to send mixed signals on the path for interest rates this week, with Richmond Fed President Tom Barkin calling a potential rate hike an "open question" on Thursday, while Cleveland Fed President Beth Hammack has argued more forcefully that the central bank should raise rates now rather than wait.
Barkin: "The Open Question Is How It Gets There"
Speaking to the Greenville Chamber of Commerce in South Carolina, Barkin said it remains unclear whether the Fed will need to raise rates to bring inflation back to its 2% target. "The inflation mystery is not whether inflation will come back to our 2% target or not. The Federal Open Market Committee has made clear that we are committed to doing so," Barkin said. "The open question is how it gets there. Will the Fed need to raise rates or is inflation already on a path down to target?"
Barkin cited core PCE inflation running at 3.7% and described the economy as resilient but not clearly cooling, declining to signal which way he leans ahead of the Fed's September meeting. He noted that he believes much of today's elevated inflation stems from temporary shocks that should pass, including higher tariffs, oil prices, and surging demand for the labor and supplies needed for the ongoing AI infrastructure buildout — a boom he said "should ease at some point." Barkin does not hold a vote on the FOMC this year, but as with other non-voting regional presidents, his remarks continue to shape the broader policy debate.
Hammack: The Fed Needs to Act Now
Hammack has taken a considerably more hawkish stance in recent appearances, arguing that current policy is not restrictive enough and that the Fed should raise rates rather than wait for further data. Speaking on CNBC, she said inflation continues to run above the Fed's target across both headline and core measures, with little evidence of near-term relief, and that she does not expect inflation to return to target until late 2027 or early 2028. She described the labor market as "reasonably healthy" and broadly balanced, while stressing that maintaining that balance requires getting inflation under control now rather than later.
A Committee Genuinely Split Three Ways
The dueling assessments come roughly two weeks after the Fed's July meeting, where the FOMC voted 9-3 to hold its benchmark rate steady in a range of 3.50% to 3.75%. Hammack was one of three dissenters favoring an immediate hike, joined by Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan — the largest hawkish dissent bloc on the committee since 2016. Barkin's more measured, undecided framing stands in contrast both to Hammack's push for immediate action and to Chicago Fed President Austan Goolsbee's more dovish comments earlier the same week, in which he characterized recent inflation data as "a little better" and pointed to labor market softness as the bigger concern.
A Fed Without Forward Guidance
The public split among regional presidents has become more consequential than usual because Fed Chairman Kevin Warsh has scaled back the central bank's use of explicit forward guidance since taking over the role in May. With the Fed's official post-meeting statements offering fewer directional hints than in past years, markets have increasingly turned to individual regional presidents' public remarks for cues on where policy is headed — leaving investors piecing together a genuinely divided committee rather than a single unified signal.
What the Data Shows
The competing views come against a backdrop of mixed economic signals: July's Consumer Price Index showed inflation cooling slightly for a second straight month, while a separate wholesale price reading came in flat for July, missing the 0.2% forecast, with the yearly gain sitting at 4.7%. Barkin noted that "many" at the Fed feel the current policy rate is already restrictive enough to bring inflation down over time, even as he stopped short of endorsing that view himself.
What to Watch Next
With Barkin declining to tip his hand and Hammack continuing to push for action, the Fed's September 15-16 meeting remains a genuine toss-up. Markets will likely continue parsing comments from other regional presidents, along with any further inflation and labor market data, for clues on which camp is gaining the upper hand ahead of the decision. For the Fed's official statements and data releases, see the Federal Reserve's press release page.