Fed's Hammack points to multiple forces behind rising bond yields
The Cleveland Fed president spoke as long-term Treasury yields sit at multi-year highs
Published · Updated
Chart: US10Y, US 10-year Treasury yield, one-minute prices, three sessions
UpdateFriday, September 25, 2026 at 3:10 PM ET
The published piece said Hammack's remarks supported the Fed holding steady with little market impact; the later filing shows markets pricing three more hikes and a broader hawkish tone toward higher rates.
Money markets are now pricing three more Fed rate hikes over the next year. Fed Chair Powell said the central bank may need to raise rates again to curb inflation, noting that September's increase was the first since 2023. Fed Chair Paulson backed a push to return inflation to 2%, said the balance of inflation risks shifted ahead of the September meeting, and pointed to the AI buildout as a source of price pressure. Fed official Schlegel also hardened the case for further hikes.
Cleveland Fed President Beth Hammack said multiple factors are driving the rise in bond yields, not any single cause tied to monetary policy.
The comment comes as long-term borrowing costs climb. The 10-year Treasury yield reached 5.17% on Thursday. The 30-year yield hit its highest level since 2004 the same day.
Hammack has struck a consistent tone this week. She has said the biggest risk to the economy is an inflationary mindset taking hold, and that underlying inflation likely remains above the Fed's target. She has also said the rate outlook could shift if progress on inflation stalls, and that Fed policy is not restraining activity outside the housing sector.
Other officials have echoed parts of that message. Fed policymaker Jeffrey Schmid recently called the level of US government debt "extreme." New York Fed President John Williams said the labor market is not fueling inflation but kept a hawkish tone on rates.
Hammack's framing, that supply pressures and expectations are pushing longer-term rates higher rather than policy alone, lines up with recent remarks from Powell and Williams. It supports the case for the Fed to hold steady rather than move quickly, and on its own points to little change in direction for markets.