Fed's Paulson Urges Gradual Approach to Rate Hikes
By Dean Seal
Philadelphia Fed President Anna Paulson is advocating a gradual approach to rate hikes as the central bank works to control inflation.
"It gives households, businesses, and the financial sector time to adjust," Paulson said in remarks at an event in Pennsylvania.
Federal Reserve officials have been airing their thoughts this week about the policy-setting committee's decision last month to hold rates steady following September's quarter-point increase.
While a hike in December is widely expected, traders have been looking for signals on whether the committee will push for a second hike in January, or possibly opt for a half-point hike in December.
Paulson, a voter on the rate-setting committee, said Tuesday that she expects more tightening to come, but would prefer to tighten gradually when conditions allow.
"I would want to act more quickly if inflation expectations drift up, if wage pressures build, or if underlying inflation moves higher," she said. "Right now, that's not what I'm seeing."
Fed governor Christopher Waller and Dallas Fed President Lorie Logan, Paulson's voting colleagues on the rate-setting committee, provided their own hawkish commentary on Tuesday, with Waller suggesting that a half-point rate increase could be on the table next month.
The odds of a half-point hike in December are at 9%, with odds for a quarter-point hike at 91%, according to CME's FedWatch tool. The odds of successive quarter-point increases in December and January sits at almost 59%.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
November 10, 2026 19:03 ET (00:03 GMT)
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