Philadelphia Fed President Paulson allows for further rate hikes — CNBC

In the United States, Philadelphia Federal Reserve Bank President Anna Paulson said the Federal Reserve may need to raise interest rates a little further to bring inflation back to its 2% target. She said this on September 24, a week after the Federal Open Market Committee raised the benchmark rate by 0.25 percentage points.

The rate is already at 3.75–4%

Following the latest decision, the target range for the federal funds rate stands at 3.75–4%. Paulson noted that this brought monetary policy closer to the level she believes is needed to lower inflation to 2%, taking into account risks to the labor market.

“If conditions evolve as I expect, some modest further tightening may be warranted,” Paulson said in prepared remarks at a fintech conference in her district.

More current news is available on the UA.News Telegram channel Telegram.

Core inflation remains above target

According to the official, price pressures eased somewhat over the summer, but core inflation is still at around 2.5–3%, which is significantly above the Fed’s target. She added that the gap from the target has shown almost no signs of narrowing. “The best thing I can say about core inflation this year is that it has not gotten worse,” Paulson said.

As CNBC reports, traders put the probability of another rate hike in October at 64% and expected another move in January. Federal funds rate futures contracts implied a rate of 4.8% at the end of 2027, corresponding to expectations of four quarter-percentage-point hikes.

New York Federal Reserve Bank President John Williams said the same day that he considers it “reasonable” to expect one more rate hike before the end of the year.