Fed Officials Hammack and Barkin Advocate Gradual Rate Hikes to Curb Inflation

Federal Reserve officials Beth Hammack and Thomas Barkin reiterated support for gradual interest rate hikes to return inflation to the 2% target. With the federal funds rate at 3.75–4.00%, Barkin identified inflation as the primary economic risk while warning that heavy AI infrastructure spending could stoke near-term price pressures and credit risks. Hammack argued that policy must enter restrictive territory. Following the remarks, market-implied odds of a December rate increase dropped from above 80% to roughly 70%.