Beth Hammack, President of the Federal Reserve (Fed) Bank of Cleveland, told CNBC in an interview on Wednesday that the key data to watch out for is how high energy prices get, but most importantly how long they stay high.

Key quotes:

Key is how high energy prices get and how long they stay high.

High energy could bring inflation but could also weigh on growth.

Rates are in a good place, baseline is staying on hold for a while.

Risks go in both ways for monetary policy.

The job market is reasonably in balance.

Fed has been missing inflation target for five years.

Consumers have been facing an extended period of elevated inflation.

Fed is still persistently missing on inflation target.

There are risks Fed could go either way with interest rate target.

Supply shocks are tricky for monetary policy.

Doesn't see job market as a source of inflationary pressure.

Inflation expectations look reasonably well contained.

It is a tough time for Fed policy making.

It's not clear right now what AI will do to the economy.

Fed independence is really important.

Amid threats to Fed, focused on doing job.

Looking forward to further debates on balance sheet.

Reserve demand issues are key to Fed balance sheet size.

It's a balancing act on how to manage Fed balance sheet.”