In her remarks at the National Association of Business Economics annual gathering, Hammack highlighted the need for a restrictive monetary policy stance to achieve the Federal Reserve's inflation target of 2%. She noted that the current inflationary pressures are broad and persistent, suggesting that it may take time to bring annual price growth down.
The personal consumption expenditures price index was reported at 3.4% year over year in August, with the core index at 3%. Hammack's comments imply that the Fed may consider additional rate increases, particularly as traders anticipate an 88% chance of a hike in December.
Her caution about the risks of an entrenched inflationary mindset underscores the challenges faced by consumers and businesses, as well as the Fed's ongoing efforts to manage inflation expectations