Fed Officials Signal Higher Rates May Be Needed as Inflation Expectations Climb
Households now expect 3.9% inflation over the next year, the highest reading since 2023, as the central bank heads toward its Oct. 27-28 meeting.
By Watchman Report staff ·
Cleveland Federal Reserve President Beth Hammack said Monday that a restrictive policy stance is appropriate to bring inflation back to 2%, according to Reuters. She said she would go to the Fed's Oct. 27-28 meeting with an open mind about another increase after September's hike, the first in more than three years.
The New York Fed's September Survey of Consumer Expectations found that median one-year inflation expectations rose to 3.9%, the highest since May 2023. Fed minutes from September cite past tariff increases, higher energy costs tied to geopolitical events, and AI-related demand for electronics as drivers of price pressure.
The latest consumer price index report, due Oct. 14, is expected to be a key test of whether inflation is cooling. Unemployment remains near 4.2%.
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