Fed Policymakers Urge Rate Hikes Amid Entrenched Inflation Risks

Three US Federal Reserve policymakers dissented from the central bank's decision to keep interest rates steady, urging rate hikes to avoid entrenched inflation.

The Fed held rates at 3.50-3.75 per cent for its fifth straight meeting on Wednesday, with three committee members dissenting in favour of a quarter-percentage-point rate hike.

According to Beth Hammack, president of the regional Cleveland Fed, 'inflation has been too high for too long.' She warned that the longer high inflation persists, the more challenging and costly it can be to bring it back down.

Neel Kashkari, president of the Minneapolis Fed, also dissented, stating that he thought it necessary to 'tighten policy incrementally as we gather more data on the path of inflation and employment.'