Hammack Says Further Rate Increases Needed to Bring Inflation to Target
She said current policy is not restrictive enough despite rising bond yields, favors smaller, more frequent hikes, and remains open on timing. Hammack warned persistent inflation could become embedded in expectations.
S. interest rates need to move higher to bring inflation back toward the Fed’s 2% target. In an interview with Barron’s, she said monetary policy remains insufficiently restrictive even as bond yields rise. Hammack favors smaller, more frequent rate increases but has not settled on when the next hike should come.
“More tightness is needed in the economy,” she said. She also cautioned that if inflation persists, it could become embedded in consumer and business expectations, making it more difficult for the Fed to restore price stability.