Fed's Paulson says more rate hikes may be needed to quash inflation
TLT•Philadelphia Fed President Anna Paulson said additional rate hikes may be needed to return inflation to the central bank’s 2% target. She said underlying inflation is running around 2.5% to 3% and that modest further tightening may be warranted if conditions evolve as expected.
1. Further tightening possible
Paulson said inflation remains stubbornly elevated and returning it to 2% is a top priority. If conditions evolve as she expects, she said, some modest further tightening may be warranted, while she will weigh risks to the labor market.
2. Inflation and economy
Paulson supported last week’s quarter-point rate increase, which brought the benchmark rate to 3.75%-4.00%, saying underlying inflation had shown little to no progress. She described the economy as resilient, citing strong consumption growth, technology-sector investment and a stable labor market.
