Federal Reserve Bank of Cleveland President Beth Hammack said on Friday she is concerned that inflation has remained above target for more than five years and that this could condition the public to accept higher prices as normal. At an event hosted by her bank, she warned that an entrenched inflationary mindset would make it harder for policy to bring price growth back to the Fed’s 2% goal. Hammack, who voted earlier this month to raise the policy rate by a quarter percentage point to a range of 3.75% to 4%, said the central bank must keep monetary policy restrictive until inflation subsides. She noted that underlying price pressures are still elevated, with the personal consumption expenditures index up 3.7% in July from a year earlier. While she said inflation expectations appear anchored, she cautioned that a generation that has not experienced sustained target inflation may shift consumer and business behavior in ways that could fuel further price gains. Hammack also observed that rising government bond yields reflect higher real rates rather than unanchored inflation expectations, and that strong tech sector investment and a solid labor market are supporting overall economic activity.