Anabelle Colaco
04 Nov 2026, 14:27 GMT+10
WASHINGTON, D.C.: Three Federal Reserve officials have called for further interest rate increases to tackle persistent inflation, in the first round of comments from U.S. central bankers since the Fed left borrowing costs unchanged earlier this week.
Dallas Fed President Lorie Logan said current inflation levels and the length of time price pressures have remained above the central bank's 2% target were "unacceptable," arguing that policymakers still have more work to do.
"It remains clear to me, given the current outlook, that the (Federal Open Market Committee) needs to implement at least two more 25-basis-point rate increases," Logan said in prepared remarks for an event at Davidson College.
After those increases, "it would make sense in my view to pause and examine economic and financial developments to determine what further action may be appropriate," she said.
Logan, who holds a vote on the FOMC this year, supported this week's decision to leave the Fed's target range unchanged at 3.75% to 4%. She said holding rates steady amid volatile markets gave the public time to adjust to the shift toward higher borrowing costs.
St. Louis Fed President Alberto Musalem, who does not vote on the FOMC this year, also argued that rates should rise.
"Additional firming of monetary policy will be necessary, and soon," Musalem said in prepared remarks for an event held by the Shadow Open Market Committee.
"Incremental adjustments made earlier are usually less disruptive than larger and abrupt actions taken later," he said.
Musalem said inflation remained too high relative to the Fed's 2% target and was unlikely to ease without further action.
"I believe that monetary policy and financial conditions remain accommodative. Financial conditions tightened recently," he said.
Richmond Fed President Thomas Barkin also pointed toward additional rate increases.
"Inflation's high, demand is solid, unemployment is relatively low. So I think the direction of travel is pretty straightforward" for future rate increases, Barkin said in an interview with SiriusXM's Business Briefing.
"The question, though, is pace ... We signaled a gradual approach. Gradual makes sense when you're not much behind the curve, where you want time to learn," he said.
The Fed raised rates in September as it sought to bring persistent inflation back toward its 2% target. Officials have broadly indicated that the tightening cycle may not be over, with investors watching the December meeting for the next potential move.
Fed Chairman Kevin Warsh did not provide guidance on what policymakers might do at their December 8-9 meeting.
"I'm encouraged by the progress we've made in a short period of time" on lowering inflation, Warsh said after this week's meeting, "but if the crux of your question is, you haven't delivered yet, you haven't achieved price stability, you're right about that. But we're working on it."
Futures markets have reduced expectations for a December rate increase, although investors still see a hike as more likely than rates remaining unchanged.
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