Paulson Warns of Persistent Inflation, Signals Potential for Further Rate Hikes

Philadelphia Federal Reserve President Anna Paulson has signaled that additional interest-rate increases may be necessary to combat elevated inflation.

Paulson noted that underlying US inflation is currently running at around 2.5-3%, which exceeds the Federal Reserve's 2% target.

The central bank raised its benchmark rate by 25 basis points last week, taking the target range to 3.75%-4.00%. Paulson emphasized that returning inflation to the Fed's target remains a key priority and that additional tightening could be appropriate if economic conditions develop as expected.