Cleveland Federal Reserve President Beth Hammack said Monday that tighter monetary policy might be needed to bring down inflation. A voting member of the FOMC, she argued that smaller, more frequent adjustments are preferable to waiting and risking larger corrections later. Market traders see a 78% probability the Fed holds rates steady in October, but nearly 88% probability of a hike at its final meeting of the year in December. Inflation remains sticky, with the personal consumption expenditures price index at 3.4% year-over-year in August and the core reading at 3%. Hammack warned that an inflationary mindset could become entrenched in the economy if price pressures persist.
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