Cleveland Federal Reserve President Beth Hammack said Monday that it's a “challenging time” for central bankers as they try to balance fighting inflation with protecting jobs.

“On the inflation side right now, I continue to be worried about where we are from an inflation perspective,” she said in an interview on CNBC.

“We have been missing our mandate on the inflation side, our objective of 2%, for more than four-and-a-half years and I continue to see that we have pressure in inflation both in the headline, in the core, and particularly, where I am worried about it, is I’m seeing it in the services,” she added.

The Federal Reserve cut interest rates for the first time in 2025 earlier in September, as policymakers tried to steady a slowing job market while facing intense political pressure to lower rates from President Donald Trump. The decision brought the federal funds rate down to a range of 4%-4.25%.

While the number of Americans filing new applications for unemployment benefits tumbled again last week, fears remain over the state of the jobs market. Rising layoffs have been cited by officials as a potential problem area, and Fed Chair Jerome Powell warned that companies not hiring is “a way of passing on tariff costs.”

Nonetheless, the better-than-expected data prompted investors to pare back expectations for more rate cuts. September’s nonfarm payrolls report is set for Friday, which will provide the next health check on the labor market.

Asked whether the Fed’s rate cut was a mistake, Hammack called it “a challenging time for monetary policy,” saying the central bank faced pressure on both sides of its mandate.

She said that the labor market looks “reasonably healthy,” but that on inflation, she doesn’t expect prices to retreat to the Fed’s target of 2% inflation until the end of 2027 or early 2028.

“When I balance those two sides of our mandate,\\" Hammack said, \\"I think we really need to maintain a restrictive stance of policy so that we can get inflation back down to our goal.”

—Catherine Baab and Chris Morris contributed to this article.