Fed's Paulson Says 'Further Gradual Tightening Seems Appropriate'

Philadelphia Fed President Anna Paulson said Tuesday evening, Nov. 10, that "further gradual tightening seems appropriate," in prepared remarks delivered the same day consumer prices were reported up 0.4% for October.

Chicago Fed President Austan Goolsbee told PBS NewsHour that report was "borderline disturbing." The Fed's next decision is due at its Dec. 8-9 meeting.

For crypto holders, the stake is the price of money. Higher policy rates lift what cash and Treasuries pay, which raises the bar for assets that pay no interest, such as bitcoin.

Paulson named three triggers for moving faster

Paulson said she backed the Fed's September increase and its October hold. "Skipping a meeting is a matter of pace, not direction," she said. She prefers small steps so families, businesses and community banks can adjust to higher borrowing costs.

She would act more quickly if inflation expectations drift up, wage pressures build or underlying inflation moves higher. "Right now, that's not what I'm seeing," she said, adding that long-term expectations are well anchored.

Goolsbee pointed to services and the AI build-out

Goolsbee said the most troubling part of the report was services inflation, which he said is "not coming down" and is probably not mostly driven by oil or tariffs. He also tied some cost pressure to demand from the data-center build-out for AI. Asked by PBS host Geoff Bennett about Governor Christopher Waller's openness to a half-point December increase, he didn't commit. "Everything is always on the table," he said.

How the tool works: the Fed sets a target for the federal funds rate, what banks charge each other for overnight loans. Raising it pushes up borrowing costs across the economy, which is meant to slow spending and, in time, prices. Services prices get close attention because they follow wages and local demand more than one-off shocks such as an oil spike.

Bitcoin was near $73,680 at 11:54 p.m. ET Tuesday, down 1.3% in 24 hours, per CoinGecko.

In our opinion: the argument inside the Fed has moved from whether to raise rates to how fast. Paulson listed exactly what would make her hurry, and she said she isn't seeing any of it yet. That makes wage data and inflation-expectation surveys the numbers to check before Dec. 9, when the decision lands.