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Paulson is latest Fed official to say more rate hikes may be needed
Yahoo Finance • • business
Key Points:
- Philadelphia Federal Reserve president Anna Paulson indicated that inflation remains a concern and suggested that further interest rate hikes might be necessary to achieve the 2% inflation target.
- Paulson highlighted that while tariff-related price pressures have eased, new inflationary pressures from the Middle East conflict and AI development have emerged, contributing to persistently elevated underlying inflation.
- New York Fed president John Williams acknowledged inflation driven by AI demand in some sectors but does not see a broad cyclical imbalance; he considers another rate hike by year-end reasonable.
- Fed governor Michael Barr also supported the need for additional rate increases to address sticky inflation, aligning with market expectations that now price in over a 60% chance of a second rate hike in October.
