Cleveland Fed president Beth Hammack warned Tuesday that it may soon be time to raise interest rates because of concerns that rising prices could get entrenched.
“For today, it’s reasonable to keep rates steady given the uncertainties around the economic outlook,” Hammack said in a speech in Cleveland. “But if recent trends continue, it may soon be appropriate to act.”
Based on the data, Hammack said she’s more concerned about the growing risks of persistently elevated inflation than the risks to full employment. She also noted that interest rates may not be sufficiently restrictive to bring inflation down to 2%.
Read more: How jobs, inflation, and the Fed are all related
“If we wait for definitive evidence that high inflation has become embedded in the economy, it may require larger policy adjustments, at greater cost,” she warned.
“For today, it’s reasonable to keep rates steady given the uncertainties around the economic outlook,” Hammack said in a speech in Cleveland. “But if recent trends continue, it may soon be appropriate to act.”
Based on the data, Hammack said she’s more concerned about the growing risks of persistently elevated inflation than the risks to full employment. She also noted that interest rates may not be sufficiently restrictive to bring inflation down to 2%.
Read more: How jobs, inflation, and the Fed are all related
“If we wait for definitive evidence that high inflation has become embedded in the economy, it may require larger policy adjustments, at greater cost,” she warned.
22 hours ago
