Statements on Inflation and Interest Rates from Cleveland Fed President Hammack

In her remarks at Jackson Hole, Cleveland Fed President Beth Hammack stated that it would be appropriate to tighten interest rate policy and adopt a restrictive stance in order to pull inflation down to the target level.

Jackson Hole Evaluations

In her statements to CNBC in Jackson Hole, Cleveland Fed President Beth Hammack stated that tightening interest rate policy would be appropriate to pull inflation back down to the target level.

She noted that she believes it would be appropriate to maintain a somewhat restrictive stance in order to help drive inflation back down to the target.

Inflation Expectations and Risks

Hammack pointed out that inflation continuing to remain above the target would make it harder to bring price pressures under control.

She added that the longer inflation stays above the target, the harder it will be to pull it back down.

Past Decisions and Data

The Cleveland Fed President was one of three dissenting officials at last month's Fed meeting who advocated for a 25 basis point interest rate hike, a view for which she dissented.

On the other hand, data released on Wednesday indicated that inflation pressures persist in the US, with the personal consumption expenditures price index rising 3.7 percent year-over-year in July.

Warning on Inflationary Mindset

The fact that inflation has hovered above the Fed's 2 percent target for more than five years remains at the center of debates regarding monetary policy.

Hammack warned that inflation remaining above the target for a prolonged period could lead to the entrenchment of a perception in society that price increases will be permanent.