Cleveland Fed's Beth Hammack warns US inflation may become entrenched
Federal Reserve Bank of Cleveland President Beth Hammack says inflation in the US might become "entrenched," meaning it could stick around longer than anyone wants.
She explained that if prices keep rising, people and businesses may start expecting higher costs as the new normal.
That would make it tougher for the Fed to hit its 2% inflation goal, even though interest rates are already up to around 4%.
Hammack warns policy not yet restrictive
Hammack points to strong business spending and a steady job market, both keeping demand high despite pricier loans.
She also mentioned that rising bond yields show investors expect higher real interest rates and believe the economy is still going strong.
Her main message: Beth Hammack said monetary policy may not yet be sufficiently restrictive, since keeping inflation in check is not getting any easier.