Philadelphia Fed President Anna Paulson Signals Potential for Modest Rate Hikes to Combat Inflation
Anna Paulson, President of the Philadelphia Federal Reserve, indicated on August 4th that further modest interest rate increases may be necessary to bring inflation back down to the central bank's 2% target. Speaking after a recent quarter-point hike by the FOMC, which raised rates to a range of 3.75%-4%, Paulson noted that underlying inflation remains at around 2.5%-3%. She emphasized that while price pressures have somewhat eased in summer months, progress toward the goal has been minimal. Paulson's remarks align with broader expectations among traders and Fed officials for additional tightening measures ahead. Market pricing now reflects a high probability of another rate hike by October, followed by further increases into early 2027. New York Fed President John Williams also expressed support for potential year-end hikes.
Topics: Fed policy inflation interest rates