Fed Officials Call for Further Policy Tightening Amid Inflation Fears

Several US Fed officials made their latest remarks on inflation and the outlook for rate hikes. New York Fed President Williams noted that the era of the US Fed relying on clear forward guidance has "ended," and another rate hike this year is a "reasonable" expectation. Philadelphia Fed President Paulson said that if the economy evolves in line with expectations, the US Fed may need to raise rates further to bring inflation back to target. Cleveland Fed President Hammack stressed that the US economy is facing a series of supply shocks, heightening the risk that an inflation mindset becomes entrenched.

US Treasury Secretary Bessent said core inflation has remained stable, and US Fed policymakers should keep an open mind on interest rates. He also believes that productivity gains from artificial intelligence and deregulation measures will help further curb US inflation.