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Cleveland Fed’s Hammack Says One Rate Hike May Not Be Enough, Sees Scope for More
Summary
- Beth Hammack, president of the Cleveland Fed, said interest-rate hikes may be needed more than once.
- Hammack said a 25-basis-point rate increase alone would be unlikely to have a major effect on the economy and that additional rate hikes may be needed.
- Hammack said the current policy rate is not meaningfully restraining the US economy and that inflation will not naturally return to the 2% target.
Forecast Trend Report by Period
Beth Hammack, president of the Federal Reserve Bank of Cleveland, said more than one interest-rate increase may be needed to bring inflation back to the Federal Reserve’s 2% target.
Hammack told Yahoo Finance on August 10 that a single 25-basis-point increase would be unlikely to have a major effect on the economy. More rate hikes may be needed, she added.
She said she did not want to prejudge how many additional increases might ultimately be necessary.
Hammack was one of three Federal Open Market Committee members who dissented from last month’s decision to leave interest rates unchanged and instead supported a hike. In a statement at the time, she warned that the longer high inflation persists, the harder it could become to return price growth to target.
In the interview, Hammack said the current policy rate is not at a level that is meaningfully restraining the US economy. She also said inflation is unlikely to return to the 2% target on its own.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.