Cleveland Fed President Beth Hammack said October 12 that restrictive monetary policy is needed to bring inflation back to 2%. Speaking in Cleveland, she favored small adjustments made promptly when feasible.
Her remarks set out her own position, not a new decision by the Federal Open Market Committee.
She pointed to repeated tariff increases and demand for computer components from artificial intelligence projects as pressures extending beyond energy.
She also described a retailer planning price increases larger than its current cost increases because it expected more inflation. That kind of pricing could make inflation harder to reduce, she warned, if households and businesses increasingly act on expectations of rising prices.
Hammack said stable employment, with unemployment at 4.2%, left room to address inflation. Her outlook remains conditional: convincing labor-market deterioration could change policy's course, while inflation above her forecast could require higher rates.
