Philadelphia Fed's Paulson Hints at More Rate Hikes to Tame Persistent Inflation

Philadelphia Federal Reserve President Anna Paulson recently expressed concerns over inflation, stating that further interest rate hikes may be necessary to bring it back in line with the Fed's 2% target.

In a fintech conference speech, Paulson noted that while inflation has shown some moderation this summer, underlying price pressures remain high at around 2.5%-3%, well above the desired level.

Paulson emphasized that even without external factors such as oil supply shocks and tariffs, inflation has persisted at elevated levels.

The comments come amidst market expectations of additional rate hikes, with traders now pricing in a 64% chance of another FOMC move in October, followed by another increase in January.