Paulson said the Federal Reserve should support measures needed to return inflation to its 2% target and highlighted the AI buildout as an additional source of inflationary pressure. The latest policy meeting set the federal funds target range at 3.75%–4.00%, while projections put 2026 PCE inflation at 3.7% and core PCE inflation at 3.4%. Markets interpreted the remarks as hawkish and shifted expectations for 2026 rate increases: the probability of two hikes fell to 48% from 64% in 24 hours, while the probability of three rose to 41.7% from 22%. Investors are watching CPI and PCE data, comments from Chair Jerome Powell and the December 2026 FOMC meeting for signals on further tightening. The new update refers to Paulson as a Federal Reserve governor, while the existing account identifies her as president of the Federal Reserve Bank of Philadelphia.