Thomas Barkin said the Fed will likely need to raise rates further, arguing a gradual pace still makes sense even though he is unsure of the exact timing or size.
Near-record low unemployment and still-high inflation are driving that view, with Barkin saying policy remains a bit accommodative rather than restrictive enough to cool consumption.
The comments come just over a week after the Fed held its benchmark rate at 3.75% to 4% while saying it needed more information, after a quarter-point increase in September.
Markets now price better than an 80% chance of a December hike and one more move in 2027, when Barkin will regain a vote on the rate-setting committee.
Barkin also flagged AI-related investment as a near-term source of price pressure and said more than $500 billion of hyperscaler debt issuance bears watching for hidden intermediary credit risks.