Cleveland Federal Reserve Governor Beth Hammark reiterated that she believes interest rates need to be raised to fight inflation under demand pressure brought about by investment in artificial intelligence. “My expectation is that we need to shift our policies to a restrictive stance to help inflation fall back to the 2% target, which is critical,” Hamak said at an event in Columbus, Ohio on Thursday. “If we don't do that, I'm worried that inflationary thinking may start to take root.” Hamak said that in the face of demand pressure brought about by data center construction, the Federal Reserve is fully capable of coping. “When I weighed these factors, what I saw was that inflation has been very stubborn and has lasted longer than I expected,” she said. Excluding food and energy prices, basic inflation rose more than expected in October. Hamak said the report showed that progress on inflation “has indeed stalled.” “The latest data I've seen shows that inflation is moving in the wrong direction. “We're moving away from the 2% target rather than moving closer to it,” she said. Last month, the Federal Reserve decided to keep interest rates unchanged in the 3.75%-4% range. Hamak is one of the two dissenting officials. At the time, she was inclined to raise interest rates by 25 basis points.

Cleveland Federal Reserve Governor Beth Hammark reiterated that she believes interest rates need to be raised to fight inflation under demand pressure brought about by investment in artificial intelligence. “My expectation is that we need to shift our policies to a restrictive stance to help inflation fall back to the 2% target, which is critical,” Hamak said at an event in Columbus, Ohio on Thursday. “If we don't do that, I'm worried that inflationary thinking may start to take root.” Hamak said that in the face of demand pressure brought about by data center construction, the Federal Reserve is fully capable of coping. “When I weighed these factors, what I saw was that inflation has been very stubborn and has lasted longer than I expected,” she said. Excluding food and energy prices, basic inflation rose more than expected in October. Hamak said the report showed that progress on inflation “has indeed stalled.” “The latest data I've seen shows that inflation is moving in the wrong direction. “We're moving away from the 2% target rather than moving closer to it,” she said. Last month, the Federal Reserve decided to keep interest rates unchanged in the 3.75%-4% range. Hamak is one of the two dissenting officials. At the time, she was inclined to raise interest rates by 25 basis points.