Cleveland Fed President Beth Hammack, also speaking on CNBC, was similarly anxious about inflation and reiterated her ongoing willingness to act to bring price pressures back in line.
"I don't want to prejudge anything," Hammack said, "but I believe now is the time to act."
Hammack, one of three Fed officials who dissented at last month's meeting in favor of a rate hike, said inflation has been above target for more than five years and monetary policy is not doing anything at the moment to restrain the economy in order to lower price pressures.
The Cleveland Fed chief said she is hearing more and more from contacts worried about inflation and she fears the longer this trend continues, the greater the risk to the central bank's credibility. Information from local contacts suggests "we're starting to get some of that inflationary mindset" embedding itself in the economy. "I don't think we're there yet, but that's what I want to make sure we avoid," Hammack said.
In a later interview on the Fox Business Network, Hammack said she believes the job market is in balance and that the U.S. central bank appears unlikely to achieve its price pressure target even by next year. "My forecast is that inflation is going to end this year around 3% and I think we're not going to make significant progress next year. I think we'll get to maybe mid-twos at best," Hammack said on the network's "Big Money Show" program.
Chicago Fed President Austan Goolsbee said his biggest fear in the short run continues to be that inflation is not under control.
"Everybody should be on edge," Goolsbee said on the Rapid Response podcast. "We hear a lot about affordability and we better be mindful because if inflation starts going up again, it's very hard to get rid of it."
Goolsbee noted that rises in energy costs tied to the war in Iran and the constant oscillation in the Trump administration's tariffs are also a concern, as they're hitting households at a time of unacceptably high inflation. He said there is a danger the public could shift toward a view that above-target price pressures are not going away.
The Chicago Fed chief, however, noted that the recent three-month inflation trend "doesn't look terrible." Asked about his outlook for interest rates, Goolsbee said the Fed's policy rate could be lowered over time if there was evidence inflation was heading back to the 2% level.
"If you're a very interest-rate-sensitive industry, I would tell you, watch the data" and "don't get so hyped up about what the market says" about the monetary policy outlook, he told the podcast.
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