Philadelphia Fed's Anna Paulson says modest rate hikes may still be needed

Philadelphia Fed President Anna Paulson said Thursday that further modest rate increases may be warranted to bring inflation back to target. Speaking a week after the FOMC raised benchmark rates by a quarter point to a target range of 3.75%-4%, she said underlying inflation is still running at roughly 2.5%-3%, well above the 2% goal. She said economic output has been solid and the labor market steady; markets now price a 64% chance of another FOMC hike, with longer-dated Treasury yields at highs not seen since 2004.