Investing.com -- Federal Reserve Bank of Cleveland President Beth Hammack said today she is concerned that prolonged inflation above the central bank's 2% target may cause the public to lose confidence that price pressures will return to target.

"The biggest risk that I see with inflation right now is that an inflationary mindset could start to set in," Hammack said at an event at her bank, noting inflation has remained over target for more than five years. She added the Fed has a role to play, saying, "We need to make sure that policy is at a restrictive stance to help bring things back down to target."

Hammack said growth has held up well and the job market is stable. She expressed concerns about demand-related pressure on inflation and noted that capital expenditures will pressure inflation for a while.

The Cleveland Fed president warned that if progress on lowering inflation stalls, expectations could shift. She also said there are many long-term questions about what artificial intelligence will mean for inflation.

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