Cleveland Fed's Hammack Backs More Tightening as Core PCE Holds at 3%
Updated
Updated · CNBC · Oct 12
Cleveland Fed's Hammack Backs More Tightening as Core PCE Holds at 3%
1 articles · Updated · CNBC · Oct 12
Summary
Beth Hammack said a restrictive policy stance may still be needed to return inflation to the Fed's 2% target, arguing for smaller rate moves made relatively quickly rather than waiting for a larger correction.
3.4% headline PCE inflation and 3% core PCE in August underpin her warning that broad price pressures could take "some time" to fade and risk entrenching an inflationary mindset.
Markets still see no immediate move as the base case: CME FedWatch showed more than a 78% chance of unchanged rates later this month, but nearly an 88% chance of a hike in December.
The remarks reinforce a hawkish tilt after the Fed's first rate increase in three years last month and September minutes that left the door open to another hike without signaling timing.