Cleveland Fed's Hammack Says More Than One Rate Hike Needed to Curb Inflation

Cleveland Federal Reserve President Beth Hammack said Monday that containing what she describes as broadening inflation will likely require more than a single interest rate increase, pushing back against market expectations that the Federal Reserve is done raising rates for now. Her comments, made in an interview with Yahoo Finance, directly challenge the dovish repricing that followed Friday's weak July payrolls report and reintroduce two-sided risk into a market that had largely settled on the Fed staying on hold.

Hammack, a sitting Federal Open Market Committee member who dissented in July in favor of a quarter-point hike, said a solitary move would probably do little on its own. "I would say in general, one 25 basis point move probably doesn't do a whole lot for the economy, so it's probably, you know, some number of movements," she said. "But I don't want to prejudge what that number is going to be." She reiterated that she does not believe the current federal funds rate range of 3.5% to 3.75% is meaningfully restricting the economy.

Her view carries significant weight as one of three FOMC members who voted against the committee's decision to hold rates steady last month,...