Cleveland Fed's Hammack: Restrictive Policy Needed Until Inflation Moves Lower

Beth Hammack, president of the Federal Reserve Bank of Cleveland, is warning that inflation risks remain high and that restrictive monetary policy should be maintained. Hammack sees elevated inflation persisting as the biggest risk, with a potential for it to become embedded in public expectations. Strong demand and capital spending could keep price pressures elevated even as economic growth continues and the labor market remains stable.

Hammack stressed that the Federal Reserve should maintain its restrictive policy stance until there is clear evidence that inflation is moving lower. This view reflects a cautious approach to monetary policy, particularly given the ongoing concerns about inflation.