Fed Defends Restrictive Monetary Policy to Curb US Inflation

Cleveland Federal Reserve President Beth Hammack stated that US monetary policy must maintain a restrictive stance. The primary goal is to guide inflation back to the 2% level within an appropriate timeframe.

Hammack noted that inflation has remained above the central bank's target for nearly six years. She observed that price pressures are widespread and stem from imbalances between supply and demand in the United States economy.

The official prefers implementing smaller and more frequent interest rate adjustments. According to her, this strategy causes less disruption for households and the functioning of global financial markets.

This approach aims to reduce the risk that monetary policy might be insufficient to control rising prices. Furthermore, the measure seeks to prevent the consolidation of an inflationary mindset within the American economy.

Maintaining high interest rates in the United States tends to strengthen the dollar against other currencies and increases the opportunity cost for risk assets like Bitcoin.