Anna Paulson, president of the Federal Reserve Bank of Philadelphia, said another increase in the benchmark interest rate may be needed.

Walter Bloomberg reported on September 24 that Paulson said underlying inflation remains stubbornly high and that the Fed may have to raise rates again.

Paulson said the Fed's September rate increase put monetary policy in a better position to respond to inflation. She added that she would support whatever steps are needed to bring inflation back to 2%. That is the Fed's inflation target.

Paulson also cited investment in artificial intelligence as a factor adding to inflation pressures. She said the U.S. economy remains resilient and the labor market is stable.