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Fed officials warn more rate hikes may be needed

By Drooid · Sep 25, 2026, 12:03 AM UTC · How we work

Summary

Anna Paulson Calls Tightening

Anna Paulson (Philadelphia Federal Reserve President) said further rate tightening may be needed to curb inflation.
She noted underlying inflation runs about 2.5%-3%, above the Fed’s 2% target.
The Fed lifted its benchmark rate to a 3.75%-4.00% range last week.
John Williams (New York Federal Reserve President) said another year-end rate hike seems reasonable.
Beth Hammack (Cleveland Federal Reserve President) warned upside-tilted inflation risks make a 2% return harder.

Summary

Trump Criticizes Fed

Benchmark 10-year Treasury yield rose above 5%, its highest since 2007.
5-year Treasury yields hit a 19-year high after weak demand at Wednesday’s auction.
President Donald Trump said the Federal Reserve (Fed) made a political rate-rise decision and urged cuts.
National Economic Council Director Kevin Hassett warned hawkish speeches by non-Trump appointees threaten Fed independence.
Major equity ETFs fell, with SPY down 0.7% and QQQ down 0.8% on Wednesday.

Summary

Mortgage Rates Surge

The Home Ownership Affordability Monitor index fell to 68 in July, a 21-year low.
30-year fixed mortgage rate rose to 7.12% for the week ending September 18, the highest since May 2024.
Mortgage applications fell 1.5% week-over-week, while adjustable-rate mortgage share rose to 9.8%.
Annual rent growth stays near 2.75% as CPI for primary-residence rents is 34% higher than December 2019.

History

Historical Context

Facing 14.8% inflation in 1980, Paul Volcker, appointed Fed chair in 1979, raised the federal-funds rate to a 20% peak by June 1981, lowering inflation below 3% by 1983. Today, Fed officials Anna Paulson, John Williams and Beth Hammack invoke that “Volcker shock,” warning core inflation near 2.5-3% and that another aggressive hike could lift Treasury yields above 5%, reviving 2007-08 stress.

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Anna Paulson Calls Tightening

Anna Paulson (Philadelphia Federal Reserve President) said further rate tightening may be needed to curb inflation.
She noted underlying inflation runs about 2.5%-3%, above the Fed’s 2% target.
The Fed lifted its benchmark rate to a 3.75%-4.00% range last week.
John Williams (New York Federal Reserve President) said another year-end rate hike seems reasonable.
Beth Hammack (Cleveland Federal Reserve President) warned upside-tilted inflation risks make a 2% return harder.

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