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Fed officials split on timing, warn inflation still not beaten

Cleveland Fed President Beth Hammack said current rates are not restrictive enough and warned that waiting as inflation stays above target increases the risk of a more entrenched inflation mindset.

Reported · Written up by our desk · Central Banks

Fed officials delivered a broadly hawkish message on inflation after their Jackson Hole discussions, but differed on how quickly policy should respond, according to Action Forex.

Cleveland Fed President Beth Hammack argued on CNBC that “now is the time to act,” saying current policy in the 3.50% to 3.75% range does not look restrictive, and warning that prolonged inflation above target raises the risk an inflationary mindset takes hold among the public.

Kansas City Fed President Jeffrey Schmid agreed that inflation remains “stubborn” and “sticky,” while pushing for more information on whether resilient demand is driving both growth and inflation, making his September stance hawkish but data-dependent.

Chicago Fed President Austan Goolsbee offered a softer view, saying his biggest near term fear is inflation not under control as Iran-related energy costs and shifting tariffs affect households, while noting recent three month inflation trends do not look terrible and leaving open the possibility of rate cuts if inflation clearly returns toward 2%.

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