Fed officials say at least two more rate rises are needed to tame inflation

Three senior US Federal Reserve officials said on Friday that interest rates will probably need to rise further to bring inflation under control, two days after the central bank left rates unchanged.

Dallas Fed President Lorie Logan was the clearest. In a speech at Davidson College, she said the Federal Open Market Committee “needs to implement at least two more 25-basis-point rate increases”. She called the level of price rises, and how long inflation has stayed above the Fed’s 2% target, “unacceptable”, according to Reuters. Logan, who votes on rates this year, said the Fed could then pause.

The Fed had held its benchmark rate at 3.75% to 4% on Wednesday 28 October, in a 10–2 vote. Two officials, Cleveland Fed President Beth Hammack and Governor Lisa Cook, voted for a rise instead. The Fed raised rates in September for the first time in three years.

St. Louis Fed President Alberto Musalem also backed further tightening, saying “additional firming of monetary policy will be necessary, and soon”. He argued that inflation was unlikely to ease without Fed action, and that small rises sooner were better than larger ones later. Richmond Fed President Thomas Barkin said the direction of travel was “pretty straightforward” given high inflation, solid demand and low unemployment, but stressed the pace should be gradual.

Fed Chair Kevin Warsh did not say what he expected at the next meeting, on 8–9 December. He told reporters that officials wanted more data before acting, while accepting that price stability had not yet been achieved. Markets still see a December rise as more likely than no change, Reuters reported.

Why it matters

Higher US rates reach far beyond American borrowers. They tend to push up the dollar, raise borrowing costs around the world, and weigh on gold and shares. For Pakistan, a stronger dollar and higher global rates can add pressure on the rupee and import costs. The message is that the Fed’s pause was a breather, not the end of tightening.

What happens next

Attention now turns to the Fed’s final meeting of the year on 8–9 December, when traders expect the next quarter-point rise. Fresh inflation and jobs data before then, and the US midterm elections on 3 November, could shift that view.

This article is for general information and education only. It is not legal or financial advice.

Sources

• https://wncy.com/2026/10/30/feds-musalem-says-a-rate-hike-is-needed-soon/ (Reuters, 30 October 2026)
• https://bingx.com/en/flash-news/post/dallas-fed-logan-sees-at-least-basis-points-of-additional-hikes-after-rate-hold (MarketWatch, 30 October 2026)