Fed officials see rates likely rising to curb high inflation
TLT•Two Federal Reserve policymakers said another rate increase is likely needed to curb inflation. The Fed raised its benchmark rate by a quarter-point last week, to a range of 3.75%-4.00%.
1. More tightening likely
Philadelphia Fed President Anna Paulson said some further tightening may be warranted if conditions develop as she expects, and New York Fed President John Williams said another rate hike may be appropriate by year-end. Both cited the need to bring inflation back to the Fed’s 2% target.
2. Inflation remains elevated
Cleveland Fed President Beth Hammack said output is growing at a solid pace and the labor market is near maximum employment, while inflation remains elevated and its outlook is highly uncertain. The Personal Consumption Expenditures Price Index rose 3.7% year over year in July, with the article citing trade tariffs and surging fuel costs as drivers.
