Arabic version: رئيسان في الاحتياطي الفيدرالي يشيران إلى احتمال الحاجة لمزيد من رفع الفائدة
According to Cnbc, Federal Reserve Presidents Alberto Musalem and Lorie Logan said higher interest rates may be needed to restrain inflation after the central bank left rates unchanged this week. Their comments added to expectations that the Federal Open Market Committee could resume rate increases at its December meeting.
Musalem, president of the St. Louis Fed, said in prepared remarks that “additional firming of monetary policy will be necessary, and soon.” He said earlier incremental adjustments are usually less disruptive than larger, abrupt actions later, and argued that smaller moves while inflation expectations are anchored have a better chance of succeeding without harming the labor market or economic growth.
Logan, president of the Dallas Fed, said the FOMC needs to implement at least two more 25-basis-point rate increases given the current outlook. She said the increases do not necessarily have to come at every meeting, adding that “skipping a meeting does not change the monetary policy destination.” After the predicted hikes, she said it would make sense to pause and examine economic and financial developments.
Musalem described the U.S. economy as resilient, citing GDP data showing a 3.4% growth rate and pointing to the artificial-intelligence buildout and accommodative financial conditions. He said the labor market has been remarkably stable and balanced, while warning that inflation remains too high. He cited annual inflation above 3% in the personal consumption expenditures price index and said policymakers are watching whether pressures broaden.
Fed funds futures traders were pricing in a roughly 76% likelihood of a quarter-point increase at the December meeting, according to CME’s FedWatch tool. Two of the 12 FOMC voters, Governor Lisa Cook and Cleveland Fed President Beth Hammack, dissented from the decision to hold rates steady because they wanted a quarter-point increase. A December hike would be the second of 2026, following a quarter-point increase in September.
