Philadelphia Fed's Anna Paulson says 'modest' rate moves likely ahead to tame inflation

Anna Paulson, a Philadelphia Federal Reserve policymaker, said she and her colleagues may need to raise interest rates further to bring inflation back to the central bank’s target. She characterized the likely moves as “modest,” according to CNBC on Sept. 24, 2026.

The remarks point to a continuation of the Fed’s restrictive policy stance, but they do not specify the number or timing of any future increases. The key change is the explicit willingness to consider additional tightening even as policymakers assess how much prior rate moves are still affecting inflation.

The immediate policy mechanism runs through borrowing costs and financial conditions: further increases would raise the cost of credit for households and businesses and could reduce demand. The comments also matter for Treasury yields, mortgage rates and interest-sensitive sectors, although no market reaction was specified.

Paulson’s wording leaves the outlook conditional. She said further increases may be needed, rather than committing to a preset path, and described the moves as modest. The remarks therefore do not establish that another hike has been decided.

The next evidence will be the Fed’s upcoming inflation and labor-market readings, followed by policymakers’ decisions on rates. The figures that would settle the policy debate are the pace of inflation relative to target and whether demand and employment remain strong enough to sustain price pressure.