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Fed’s Hammack warns persistent inflation could delay return to target

Hammack said the longer inflation stays elevated, the harder it gets to bring price growth back toward the Fed’s target, while the dollar index held an upward bias.

Reported · Written up by our desk · Central Banks

Cleveland Federal Reserve President Beth Hammack warned that US inflation remains elevated and that persistent price pressures could make it increasingly difficult for the Fed to achieve its goals, according to Reuters as cited by FXStreet.

Hammack said price stability is the central bank’s responsibility and noted that risks around inflation are tilted to the upside, with supply shocks posing a challenge for monetary policy. She also warned that allowing above target inflation to persist could have lasting consequences.

FXStreet said Hammack’s remarks were met with little immediate reaction in the US dollar, with the US Dollar Index, which tracks the greenback against six major currencies, up 0.14% to around 101.25 at the time of writing.

The article also pointed to expectations for further Fed tightening, saying CME FedWatch assigns about a 71.0% chance of another rate hike at the October meeting, up from roughly 55.0% a week earlier.

Latest closeDollar index 101.29 ▲0.2%

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