Philadelphia Fed's Anna Paulson Signals Modest Further Rate Hikes to Tame Inflation

CNBC··US·Read original
3▲3 ▼0Impact / 5
Summary · why it matters

Philadelphia Federal Reserve President Anna Paulson said Thursday that she and her colleagues may need to raise interest rates further to bring inflation back to target. Speaking a week after the Federal Open Market Committee raised benchmark borrowing rates by a quarter percentage point to a target range of 3.75%-4%, Paulson said some modest further tightening may be warranted if conditions evolve as she expects. She said underlying inflation is still running around 2.5%-3%, well above the Fed's 2% target, and that the gap has shown little signs of closing. Paulson added that economic output has been solid while the labor market is holding steady. Her comments came as markets raised their expectations for Fed tightening, with traders pricing in a 64% chance the FOMC hikes again in October and expecting another move in January, according to the CME Group's FedWatch tool, while fed funds futures imply a rate of 4.8% by the end of 2027. New York Fed President John Williams said earlier Thursday that he thinks it is reasonable to expect another hike before the end of the year.

Impact on assets 3

Carbon Removal (DAC)▲ · 1 stocks
CME Group Inc
CME
▲ PositiveDemandrelevance

Article cites CME Group's FedWatch tool showing traders pricing a 64% chance of another October hike, implying increased hedging/derivatives activity on CME.

Others▲ · 2 stocks
％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Paulson and Williams signal modest further rate hikes, and markets now price a 64% October hike, pushing the effective fed funds rate higher.

© 2026 MarketIVNews