Hammack Says More Rate Restraint Is Needed, Timing Open

Cleveland Federal Reserve President Beth Hammack said she believes interest rates need to rise further to cool demand and bring inflation down, while leaving open whether the central bank should raise rates at its October 27-28 meeting. In an interview on October 12, Hammack said she would approach the meeting with an open mind after the Federal Reserve raised rates in September. She said more restraint was needed but that the timing remained an open question. Investors were reported to expect the Fed to hold rates steady at the meeting. Hammack said corporate investment and wealth-supported consumer spending were sustaining demand and keeping inflation in a range of about 2.5% to 3%. She said a pullback in either could ease price pressures without placing as much of the burden on consumers and workers. She described the labor market as stable and said she wanted to reduce inflation without weakening employment unnecessarily. In prepared remarks to the National Association for Business Economics, Hammack said inflation pressures were broad-based.