Fed Officials Signal Potential for More Rate Hikes Amid Persistent Inflation

Philadelphia Federal Reserve President Anna Paulson said on Thursday that inflation remains a concern and may require further interest rate hikes. She noted that underlying inflation hasn't shown signs of coming down, despite the Fed's rate hike last week.

Paulson, a voting member of the rate-setting committee this year, had previously been in favor of holding rates steady. However, she said that by the time of the policy meeting last week, it was clear that inflation needed more attention.

The Fed's rate hike, Paulson stated, 'brings policy closer to what I believe is needed to return inflation to 2% at a pace that balances inflation with risks to the labor market.' She added that if conditions evolve as she expects, some modest further tightening may be warranted.