- Cleveland Fed President Beth Hammack said in prepared remarks at the National Association of Business Economics gathering that a restrictive monetary policy stance is appropriate to ensure a timely return to 2% inflation.
- Hammack said it is preferable to make smaller adjustments relatively quickly rather than wait and risk a larger course correction.
- Traders priced a more than 78% likelihood that the Fed holds rates unchanged at its October meeting and a nearly 88% chance of a hike at the December meeting, per CME FedWatch.
- The PCE price index rose 3.4% year over year in August, and core PCE registered 3%, according to the article.
- Hammack said long-run inflation expectations remain anchored but that persistently elevated inflation raises the risk of an inflationary mindset becoming entrenched.
Quotes
“When feasible, I generally think it's preferable to make smaller adjustments, and to do so relatively quickly, rather than to wait and risk needing a larger course correction”
“With each passing month, persistently elevated inflation raises the risks of an inflationary mindset becoming entrenched in the economy”