Federal Reserve Bank of Cleveland President Beth Hammack said policy is not restrictive and inflation is too high, warning that the longer it stays above the Fed's objective, the harder it will be to bring it down. In a LinkedIn post, the Federal Open Market Committee voting member noted that inflation is still above 3%, the labor market is stable and near maximum employment, and businesses across the Fourth District report rising costs and tough choices. Sharing an anecdote, she said a medium-sized manufacturer in Northeast Ohio supports rate hikes despite higher rates being bad for business, because he has seen double-digit inflation in many input costs. Hammack concluded that such stories complement hard data and that it is time to act.
Hammack, an FOMC voter, says inflation too high and time to act, implying rate hikes which raise the policy rate.
Hawkish comments signal potential rate hikes, pushing yields up and bond prices down.
