Philadelphia Fed's Paulson Signals More Rate Hikes After Fed Lifts Benchmark to 4%
Updated
Updated · CNBC · Sep 24
Philadelphia Fed's Paulson Signals More Rate Hikes After Fed Lifts Benchmark to 4%
2 articles · Updated · CNBC · Sep 24
Summary
Anna Paulson said some modest further tightening may be warranted after last week's quarter-point Fed hike lifted the funds rate target to 3.75%-4%.
Underlying inflation is still running around 2.5%-3%, she said, with little sign of closing the gap to the Fed's 2% target despite some summer moderation in price pressures.
Paulson said inflation has stayed elevated beyond oil-supply shocks from the Iran war and tariffs, while economic output remains solid and the labor market is holding steady.
Markets have already shifted toward that view: traders now price a 64% chance of another hike in October and see rates reaching 4.8% by end-2027, while New York Fed President John Williams also called another increase this year reasonable.