The Federal Reserve needs to increase interest rates to establish a restrictive monetary policy in order to curb price growth, according to Cleveland Fed President Beth Hammack. Hammack warned that recent economic data shows inflation is moving in the wrong direction and that price pressures are broadening, citing the ongoing build-out of artificial intelligence as a primary driver of demand and cost increases.
The hawkish comments prompted a sell-off in precious metals, with gold falling 3% on Nov 12. Hammack’s remarks indicate that current borrowing costs remain insufficient to offset the inflationary impacts of technology investments and wider demand pressures.
