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Cleveland Fed chief says current rates are not restrictive enough

Beth Hammack argued the Fed could need more rate hikes to avoid lasting delays in reaching its 2% inflation goal.

Reported · Written up by our desk · Central Banks

Cleveland Fed President Beth Hammack said the current interest-rate level is not “meaningfully restricting the economy,” arguing the Federal Reserve still needs some number of additional rate hikes. In remarks to Yahoo! Finance, she said a single 25 basis point move would likely not do much for the economy.

Hammack also said she is not hearing from businesses that they sense restraint in growth investment tied to current interest rates. She added that the longer the Fed waits, the longer it risks missing its 2% inflation goal.

The comments come as the Fed continues to use interest-rate adjustments to pursue its two mandates, price stability and fostering full employment. The Fed holds eight policy meetings per year, with the FOMC assessing economic conditions and making policy decisions, and its rate moves can affect borrowing costs and the US dollar through changes in relative attractiveness to investors.

FXStreet also included a snapshot of the US dollar's moves versus major currencies on the day of the remarks, noting the dollar was strongest against the Japanese yen.

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