Paulson Warns of More Hikes as Inflation Proves Elusive

Federal Reserve Chairman Henry Paulson has warned that more interest rate hikes may be necessary to combat inflation, which is proving harder to tame than expected. In a recent statement, Paulson emphasized the importance of maintaining price stability and achieving full employment. The Fed's two-mandate framework remains unchanged: control inflation at or below 2% and foster maximum employment.

The US dollar has been strengthening against major currencies due to higher interest rates, making it an attractive destination for foreign investors. However, this also raises concerns about the potential impact on economic growth. Paulson's warning suggests that the Fed may need to continue tightening monetary policy to keep inflation in check.