Fed's Hammack Advocates Further Rate Hikes to Cool Demand and Stubborn Inflation

Cleveland Federal Reserve President Beth Hammack signaled the need for additional monetary policy tightening, stating that interest rates must climb further to temper economic demand. Hammack observed that inflation remains stuck between 2.5% and 3.0%, buoyed by significant capital expenditures in artificial intelligence infrastructure and consumer spending among higher-income households. While markets expect a pause at the October 27-28 FOMC meeting following a rate increase in September, Hammack noted she remains open-minded on the pace of future hikes, aiming to restrain the economy without driving unemployment above its current 4.2% rate.