Fed President Beth Hammack favours gradual rate hikes to lower inflation
Cleveland Federal Reserve President Beth Hammack suggested smaller, more frequent interest rate adjustments to reduce price pressures without disrupting markets.
Cleveland Federal Reserve President Beth Hammack said on Thursday that the US central bank must continue working to bring inflation down to its 2 per cent target. According to the Economic Times, Hammack noted that price pressures remain unacceptably high.
Speaking at an event in Zurich, Hammack stated she expects monetary policy to move to a restrictive stance to reach the inflation target in a timely manner. She expressed a preference for achieving this through frequent, smaller adjustments to minimise disruption to households, businesses, and financial markets.
Hammack argued that gradual increases would reduce the risk of policy falling behind and prevent an inflationary mindset from taking hold. She has previously argued that current monetary policy and financial conditions are not providing enough restraint to the economy.
The Federal Reserve (Fed) last week kept its benchmark interest rate within the 3.75%-4.00% range. Hammack and Fed Governor Lisa Cook dissented in favour of a rate hike during that meeting, while Hammack also dissented in late July when rates were left unchanged.
Addressing the status of the US dollar, Hammack said it remains the world's reserve currency due to the strength of US institutions and the legal system. She added that she does not foresee the dollar losing its international role and remains skeptical that cryptocurrencies pose a threat to its status due to their price volatility.