Fed Vice Chair Philip Jefferson said officials may need more time before deciding whether to raise interest rates again, echoing signals from another Fed leader this week that cast doubt on bets the central bank would lift rates at its meeting later this month

Federal Reserve Bank of Minneapolis President Neel Kashkari explained on Wednesday (Sep 30) that he anticipates the central bank will raise rates again, contingent on the economy's performance, in an effort to reduce inflation to the 2 percent target. He stated that the forecast of additional interest rate hikes following the September Federal Open Market Committee meeting was based on information available at that time.

Kashkari emphasized that current inflation data still indicates the need for higher rates, despite the latest figures not altering this assessment. He noted that over his decade-long tenure, he once thought it impossible for the U.S. to endure five years of elevated inflation, yet the situation now presents that challenge. Despite the difficulty, Kashkari expressed confidence in the effectiveness of monetary policy in bringing inflation back to target.

This assessment comes after New York Fed leader John Williams suggested on Tuesday that while an increase in interest rates before the year's end is possible, it's not urgent given the recent hike on Sep 15-16. The Fed raised the overnight target rate by a quarter percentage point, aiming to mitigate inflation pressures that have persisted beyond the target for over five years.

The central bank also considers strong growth and a stable labor market as factors allowing them to prioritize inflation reduction. At their September meeting, officials indicated additional rate hikes before year's end, but market expectations had anticipated more aggressive tightening prior to Williams' comments on Tuesday. The Fed's rate hikes have led to rising bond yields, potentially acting as a mechanism to curb economic growth and aid in the fight against inflation.