Fed's Paulson Sees More Rate Hikes Ahead to Tame Inflation

Philadelphia Fed's Anna Paulson sees 'modest' interest rate hikes ahead to curb inflation.

In prepared remarks for a fintech conference, Paulson said that despite some moderation in price pressures over the summer, underlying inflation remains at around 2.5%-3%, well above the Federal Reserve's target of 2%.

The Fed President noted that even outside of external shocks such as the Iran war and tariffs, inflation has held higher, and that 'the best I can say about underlying inflation this year is that it hasn't gotten worse.'

Paulson's comments come after the Federal Open Market Committee raised benchmark borrowing rates by a quarter percentage point last week, taking the key funds rate to a target range of 3.75%-4%.