Federal Reserve Hamak: Monetary policy still needs to be tightened to contain inflation

Mr. Hammarck, the Federal Reserve, said that while the dollar was not at the centre of central bank discussions, its weakness this year did not appear to be a cause for concern. "I think there has been a lot of talk this year about the dollar and its weakness," Mr. Hammarck said. "But it's important to remember that we started with an extremely strong dollar, so much of this year's weakness has simply brought the dollar closer to a theoretically fair valuation and more reasonable compared to other currencies." Mr. Hammarck also said interest rate policy should remain restrictive in order to put downward pressure on inflation, which remains a concern. "This is a difficult time for monetary policy given the challenges to the Fed's dual mandate on inflation and employment," she said. But taken together, I think we need to maintain some degree of tightening in order to continue to put pressure on inflation to get it back to our target level. "