Hammack Sees Multiple Rate Hikes Needed for Inflation Control

Cleveland Federal Reserve president Beth Hammack said that more than one interest rate increase will likely be needed to address broadening inflation, according to a report by Yahoo Finance. She described inflation as 'broadening' and indicated that a single quarter-point move would not have a significant economic impact.

Hammack dissented at the Federal Reserve's July policy meeting, where the Federal Open Market Committee chose to hold rates steady, as she had preferred a quarter-point increase at that time. She argued that the current interest rate range of 3.5% to 3.75% is not meaningfully restricting economic activity, noting that business contacts have not reported any restraint on investment or growth due to borrowing costs.

Hammack said that delaying action would prolong the period during which inflation remains above the Fed's 2% target, making it harder to bring price growth back down. She compared the approach to easing toward a stop sign rather than braking abruptly, and reiterated that policy should begin to tighten now.