Cleveland Fed President Beth Hammack outlined these concerns during a CNBC broadcast on June 30.
"If consumer data holds up, Fed policy may not be restrictive enough," said Hammack. "Inflation is still too high, Fed may need to consider rate hikes."
She added that the job market is around full employment and growth looks good.
Further emphasizing this shift, Fed Governor Christopher Waller reversed his previous dovish stance on interest rate cuts, citing rapid stabilization in the labor sector alongside accelerating inflation metrics.
"So I was willing to tolerate a longer movement back toward 2% target based on the labor market.
But … those risks have completely flipped around now. Labor market seems to be stabilizing in the U.
S. , inflation’s been taking off.
So then that changes how you might want to think about policy," said Waller.
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The weekly Redbook sales index recently reported an 11.5 percent year-over-year growth, matching retail strength that has deterred policymakers from adopting looser credit conditions ahead of the next scheduled Federal Reserve meeting.
