A Fed Member Voted To Hike Rates In July. She Said More Than One Increase Could Be Needed To Tame Inflation.

Cleveland Federal Reserve president Beth Hammack said more than one interest rate hike could be needed to tame inflation.

Hammack, who among the minority of FOMC voters who supported increasing rates in the July meeting, told Yahoo Finance that “in general, one 25 basis point move probably doesn’t do a whole lot for the economy.”

“So it’s probably some number of [movements]. But I don’t want to prejudge what that number is going to be,” she added, saying she doesn’t “know exactly where we will end.”

Hammack went on to say that current rates, ranging between 3.5% and 3.75%, are not “meaningfully restricting” the economy at the moment.

“When I’m talking to businesses, I’m not hearing that they’re sensing any restraint from investments in growth based on where interest rates are,” she said. “So to me that says that now is the time to act.”

Minneapolis Fed President Neel Kashkari has also said that action is needed now. He claimed that a “potential series of small policy moves would be better than waiting and eventually concluding that even bolder actions were necessary.” The third official who voted for a hike was Dallas Fed Lorie Logan, while the remaining nine favored a hold.

Among those who voted in favor of holding rates where they are, Fed Governor Lisa Cook said that even though she voted against hiking interest rates, she is ready to do so if inflation does not decrease towards the central bank’s 2% goal.

Speaking during a speech in Alaska, she said she believes “the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point.”

“If I do not see signs of continued disinflation soon, I am prepared to act,” she noted.

However, Cook said she believes the effects of tariffs imposed by the Trump administration on prices are already subsiding, even if the situation remains somewhat uncertain.

Another official who defended the decision was Philadelphia Fed President Anna Paulson, who said she believes the current level of interest rates is enough to drive inflation back to the central bank’s goal.

Speaking to CNBC, she said that while she could reassess her position if circumstances change, the current policy “has been mildly restrictive to get underlying inflation back down to 2% in an acceptable time period.” She went on to say that she needs go see “progress from here.”