Home›Bonds & Rates›Central Banks›Fed’s Hammack urges immediate rate hikes despite impro…

Fed’s Hammack urges immediate rate hikes despite improved inflation data

Cleveland Fed President Beth Hammack said businesses still eager to borrow and invest, plus pre-emptive price increases, are reasons current policy is not restrained enough to speed inflation back toward 2%.

Reported · Written up by our desk · Central Banks

Cleveland Fed President Beth Hammack reiterated that the Fed should raise rates now, arguing current policy is not providing enough restraint to return inflation to the central bank’s 2% objective quickly enough.

Speaking in Dayton, Ohio, Hammack acknowledged inflation data improved over the past two months but said that was not enough for her to be confident disinflation will persist or fall low enough to reach target.

She warned that businesses remain eager to borrow and invest and that firms may raise prices pre-emptively due to expected future cost pressures, while households face strain from high gasoline and living costs.

Hammack also challenged the idea of tolerating a very gradual return to target, saying prolonged inflation has real consequences and concluding that the Fed needs to act now to preserve credibility, even after two softer inflation reports.

Latest closeGasoline (RBOB) $2.882 ▼8.1%

More like this

Sources