Fed's Harker: Multiple Rate Hikes May Still Be Needed to Bring Inflation Down

BlockBeats reported on Aug. 11 that Cleveland Fed President Patrick Harker said inflation has yet to return to the Fed's target, and policymakers may need to raise interest rates multiple times. Harker said a 25-basis-point increase "would not have a significant impact on the economy," but did not specify how many hikes might be required or where the terminal rate could land. In Harker's view, the current 3.50%–3.75% policy rate range has not materially restrained activity. She said businesses have not meaningfully pulled back growth investment in response to higher borrowing costs, arguing that "now is the time to act." She warned that delaying action would make it harder to return inflation to 2%. Separately, Hammack said the labor market shows no major problems at present and that July's employment data would not change her focus on inflation. She added that markets can support the Fed's efforts but cannot replace them. Hammack opposed holding rates steady at the Fed's July meeting and favored a 25-basis-point increase. (Jin10)