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Philadelphia Fed's Paulson keeps an open mind on rate outlook
Anna Paulson said improving inflation data is welcome but not enough, and she flagged a data driven watch on policy impact after last week's FOMC meeting held rates at 3.5% to 3.75%.
Federal Reserve Bank of Philadelphia President Anna Paulson said she is keeping an open mind about the path for monetary policy, while emphasizing that inflation progress remains incomplete. In a statement, Paulson called recent improvement in some inflation data welcome, but said it is only one step toward the Fed's 2% inflation goal.
Paulson said her highest priority is delivering 2% inflation while sustaining full employment. She also noted that the data suggests Fed policy is already providing some restraint on the economy, and she plans to keep watching incoming data as she forms her decisions.
Paulson's comments came as the Fed prepares for the next policy update after last week's Federal Open Market Committee meeting. Reuters reported that officials held the overnight interest rate target range steady at between 3.5% and 3.75%, despite inflation pressures that remain well above 2%.
The statement followed the FOMC meeting where three officials dissented and voted for a rate hike, and Fed Chair Kevin Warsh declined to provide guidance on where policy should be headed. Paulson indicated she supported the decision to keep the target rate steady.