Fed: Job of fighting inflation not yet done

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Cleveland Fed President Beth Hammack said that while progress in lowering inflation has resumed in recent months, officials are not yet ready to declare their mission accomplished. This echoes recent comments by Federal Reserve Chairman Jerome Powell.

Hammark said on Thursday that "we have made good progress, but inflation remains above the Federal Open Market Committee's (FOMC) 2 percent objective." "COVID-19 and its aftermath remind us that different movements in the components of inflation can have important implications for the path of overall inflation."

At a conference hosted by the Cleveland Fed's Center for Inflation Studies, Hammark made her first public remarks since becoming a Fed policymaker in August.

She pointed to several factors that could continue to put upward pressure on prices. She said geopolitical events could lead to a "rapid reversal" of recent declines in energy prices.

Hammark also said that while housing services inflation has fallen, the Cleveland Fed's research suggests that inflation is likely to remain high as existing tenants face gradual rent increases.

The Cleveland Fed president said that while the Fed's progress in fighting inflation has not been "in a straight line," officials have been able to cool price growth while maintaining significant strength in the labor market and overall economy.

Hammark did not comment on how quickly or by how much the Fed would cut rates. She has a vote on this year's FOMC interest rate decision.

Policymakers cut rates by 50 basis points at their meeting last month, their first cut since the coronavirus outbreak, as the labor market showed signs of weakness and inflation moved closer to the Fed's 2 percent target.

Several policymakers have recently indicated that they favor a slower pace of rate cuts in the coming months.

Editor: Ma Mengwei