Fed's Hammack: Appropriate to Put 'Some Restraint' Into Rates as Inflation Persists
Key Takeaways
- •Beth Hammack said it is appropriate for interest rates to include some restraint.
- •She said inflation is showing more persistence and warned that delayed action could increase future pain.
- •Hammack cautioned that repeated inflation misses could encourage an inflationary mindset.
- •Hammack has led the Federal Reserve Bank of Cleveland since August 2024 after succeeding Loretta Mester.
- •Kevin Warsh is scheduled to speak at the Jackson Hole symposium at 10 a.m. ET the next day.
Cleveland Federal Reserve President Beth Hammack said it is appropriate to put "some restraint" into interest rates, warning that "the longer they wait, the more pain will come later."
"I'm seeing more persistence in inflation," Hammack said. She cautioned that the problem with the Fed missing on inflation for so long is "an inflationary mindset creeping in," adding, "I don't think we're there yet on the inflation mindset, but that's what I want to avoid." Her remarks add to the range of public Fed commentary as policymakers continue to balance inflation concerns against the risk of keeping policy tight for too long.
Hammack voted to hike rates, so the hawkish comments come as no surprise. She has led the Federal Reserve Bank of Cleveland since August 2024, when she succeeded Loretta Mester as president, following a career of roughly three decades at Goldman Sachs.
Looking ahead, the Fed's Kevin Warsh speaks tomorrow at Jackson Hole at 10 a.m. ET. The event is the Federal Reserve Bank of Kansas City's annual economic policy symposium, held each August in Jackson Hole, Wyoming, a gathering at which the Fed's leadership has traditionally laid out its policy thinking. Warsh is a former Federal Reserve governor who served on the board from 2006 to 2011.
Source: Fed's Hammack: It's appropriate to put some restraint into rates — investingLive (ForexLive)
