Philadelphia Fed President Anna Paulson believes that further moderate rate hikes may be needed to bring inflation back to the Federal Reserve’s 2 percent target. She said this in a speech on Thursday.
The Fed raised its policy rate by 0.25 percentage points last week to a range of 3.75–4 percent.
Paulson points out that underlying inflation remains at 2.5–3 percent and shows little sign of approaching the target.
A majority of Fed officials expect another 0.25 percentage-point hike this year.
