Hammack urges restrictive policy to tackle inflation

• The official expressed concern about the economy developing an inflationary mindset
• Significant demand-side factors are adding to elevated inflation
• The central bank has fallen short on its inflation objective for several years
• On the employment side, the Fed has performed well according to her

Hammack has consistently ranked among the most hawkish Fed officials currently serving. She voted against the majority in July, favouring a rate increase instead.

Currently, financial markets are factoring in 28 basis points of tightening for December as they consider the possibility of a 50-basis-point move. Over the next twelve months, 83 basis points of increases are priced in. The US two-year yield has risen 9 basis points to 4.82% today, while the ten-year yield has climbed to 5.05%. That trend has extended into foreign exchange, where the US dollar is barely changed on the session.