Fed's Hammack says US needs to maintain restrictive policy amid inflationary pressures

(Reuters) -The U.S. Federal Reserve needs to maintain a restrictive stance of monetary policy to get inflation down to its 2% target, Cleveland Fed President Beth Hammack told CNBC's Squawk Box Europe on Monday.

"It's a challenging time for monetary policy. We are being challenged on both sides of our mandate," she said, referring to inflation and maximum employment.

"When I balance those two sides of our mandate, I think we really need to maintain a restrictive stance of policy so that we can get inflation back down to our goal," she said.

Hammack, among the most hawkish Fed policymakers, and not a voter on policy this year, said she expected inflation to remain above target for the next 1-2 years.

"When I start seeing pressure in the services side, things like insurance that feeds into our super core inflation that, to me, says that maybe this isn't just coming from the tariff impacts, and it's something we need to be more attentive to," Hammack added.

Last week, Hammack had said that the Fed needed to be "very cautious" in removing restrictive monetary policy with inflation still above the central bank's 2% target and remaining persistent.

(Reporting by Shubham Kalia in BengaluruEditing by Peter Graff)

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