MNI BRIEF: Fed's Hammack - Policy Must Stay Restrictive

The Federal Reserve must maintain a somewhat restrictive stance of monetary policy in order to dampen an inflation rate that is still well above the central bank's target and appears to be moving in the wrong direction, Cleveland Fed President Beth Hammack said Thursday. 

"On balance, I think we need to remain somewhat restrictive to continue putting pressure to bring inflation back down to our target," she told the Economic Club of Pittsburgh.  

"I expect that we will continue to see some elevated pressures and inflation into the end of this year and into the beginning of next year. And so again that's what tells me that we should be leaning on that somewhat restrictive stance of policy to make sure that inflation is still coming back to target." (See MNI INTERVIEW: Tariff Price Boost Still Percolating-Schoenle)

Hammack said what she hears most frequently from business leaders is inflation is still too high and moving in the wrong direction. The job market is weakening but remains near full employment as measured by the jobless rate, she said.