The broader economy, she argued, offers the Fed room to act. The unemployment rate sits at 4.1%, a level she described as consistent with maximum employment.
Real consumption grew at an annualized rate of 3.4% in the second quarter of 2026, and the Atlanta Federal Reserve Bank’s GDPNow model was pointing to above-4% growth in the third quarter.
The labor market has broadened, with total job gains averaging 74,000 per month over the summer.
Meanwhile, another Fed rate hike before the end of 2026 is a “reasonable” expectation, New York Federal Reserve President John Williams said Thursday, though he declined to say whether it will come in October.
Other officials have said similar things. Fed Governor Michael Barr said Wednesday that “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”
