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Cleveland Fed official says more than one rate hike may be needed
Beth Hammack said a single 25 basis point move would likely do little, while noting Fed officials are set to wait until mid-September for their next meeting.
Federal Reserve Bank of Cleveland President Beth Hammack warned in an interview with Yahoo Finance that quelling inflation may take more than just one rate hike. She said a single 25 basis point move probably would not do much for the economy, while declining to specify a number.
Hammack also emphasized that the Fed should not step back from its mandate to ensure stable prices, saying markets are a complement rather than a substitute for policy action. She told Yahoo Finance that the central bank must stand behind its words with its actions when appropriate.
In late July, Fed officials voted 9 to 3 to keep the federal funds rate unchanged in the 3.5% to 3.75% range for a fifth straight meeting. The dissenters supported a quarter-point increase to address inflation pressures linked to energy supply shocks related to the Iran War, including higher gasoline prices and downstream costs for diesel-dependent goods such as groceries.
Hammack said she has heard consumers and businesses report rising anxiety about persistently higher prices. She described inflation as swallowing workers' wage gains and broadening pricing pressures for businesses, and noted Fed officials will not reconvene until mid-September, with two inflation readings due before then.
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