Cleveland Fed's Hammack: Rates Need More Restraint to Cool Inflation Without Hurting Jobs
CLEVELAND — Cleveland Federal Reserve President Beth Hammack told Reuters on Monday, October 12, that she hopes the Fed can lower inflation without damaging the job market, but that doing so may entail cooling the blistering pace of corporate investment or the market-driven wealth gains fueling personal consumption.
Hammack said those are the factors driving demand and helping sustain inflation that seems lodged in the 2.5%-to-3.0% range. They could perhaps be cooled enough by restrictive monetary policy for inflation to decline without unemployment rising beyond the current 4.2% jobless rate, she said. Recounting conversations with business leaders, she said she hears more that the economy is booming than that people are looking to pull back, adding that she likes growth and is not trying to stop it, only to pull it back to a pace that does not put too much pricing pressure on the economy. She said curbing activity on the capital-expenditure side might spare consumption a heavier hit, though she did not know precisely which side would be affected.
Hammack said she feels interest rates need to move higher to restrain demand, but added she would go to the Fed's October 27-28 meeting with an "open mind," specifically about whether the Fed should lift rates then after September's hike. She said over what period of time more restriction is added remains an open question to her. Hammack is a voter on rate policy this year and dissented in July in favor of a rate hike. Investors currently expect the Fed to stay on hold in October, according to Reuters.
She also said the Fed is being challenged on only one side of its mandate, with inflation high but the labor market stable around full employment. Reuters described her comments as among the most explicit from a Fed official about the need to cool demand through restrictive monetary policy. The Federal Open Market Committee next meets on October 27-28, with September inflation data due before the meeting.
Source: Reuters interview with Cleveland Fed President Beth Hammack, October 12.
Source: 路透社对Cleveland联储主席哈马克的专访
Published by GSM · USA (original Chinese edition)
Photo: 克利夫兰联储主席贝丝·哈马克官方肖像，美联储（公有领域，Wikimedia Commons）
