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Fed Official Eyes Inflation Fight Without Job Losses
13 Oct
Summary
- Hammack aims to lower inflation while preserving the job market.
- Cooling corporate investment could reduce demand-driven inflation.
- Restraining demand requires higher interest rates, Hammack stated.
Cleveland Federal Reserve President Beth Hammack expressed her hope to lower inflation while safeguarding the job market. She suggested that tempering strong corporate investment could be a key to reducing demand-driven price pressures.
Hammack believes that restrictive monetary policy could lead to a decrease in inflation without a significant rise in unemployment. She noted that consumer spending appears to be supported by gains at the higher income levels and the wealth effect.
While she feels interest rates need to increase to curb demand, Hammack plans to approach the upcoming Federal Reserve meeting with an open mind regarding immediate rate hikes. Her primary focus is on addressing inflation deliberately to avoid weakening the labor market unnecessarily.
