Federal Reserve official Beth Hammack has expressed concern that the central bank’s interest rate hikes may not yet be sufficient to curb inflation, citing businesses’ continued ability to dictate prices and a surprisingly resilient economy. Hammack’s worry stems from the observation that companies are still able to pass on increased costs to consumers, a sign that demand remains robust and that the Fed’s tightening policies haven’t fully cooled economic activity. This sustained pricing power suggests that inflationary pressures could persist longer than anticipated, implying that interest rates may need to remain at their current elevated levels or even increase further to achieve the Fed’s target of price stability.
Adapted from: WSJ.com: Markets
