Fed's Paulson (2026 Voter, Neutral) says the September inflation numbers drove the rate hike
Fed policymaker Paulson indicated that elevated inflation drove September's rate hike, noting resilient economic momentum and warning that further interest rate increases may be necessary.
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The labour market is stable. The economy is resilient and showing signs of increased momentum. Underlying inflation remains stubbornly high. AI buildout is helping drive inflation pressures. Balance of inflation risks shifted ahead of the September policy meeting. Best you can say about inflation is that it has not got worse. She will support doing what is needed to get inflation back to 2%. The September rate hike helped move policy to a better inflation-fighting posture. US central bank may need to raise interest rates again to lower inflation.
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