Federal Reserve official Beth Hammack has called for a more restrictive monetary policy and additional rate hikes to contain persistent inflation. Her comments align with her earlier request for a 25-basis-point increase in the federal funds rate at the Federal Open Market Committee meeting. The current target range is 3.75% to 4.00%, while prediction markets assign a 77.5% probability to two rate hikes in 2026 and a 21.5% probability to a single hike. Jerome Powell’s upcoming statements, future inflation data and the Fed’s decisions will be crucial in determining whether further tightening is likely. A shift in language about policy not yet being restrictive enough, or an increase in the terminal rate in the projections chart, could indicate greater support for additional hikes.
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