Philadelphia Federal Reserve Bank President Anna Paulson said the current level of interest rates is appropriate, helping to keep inflation in check.
She added that it is 'healthy' for investors to consider scenarios where rates might need to rise.
Paulson noted that monetary policy is mildly restrictive, countering the effects of tariffs and Middle East conflict price increases.
She said market moves align with her thinking, with bets now leaning toward rate hikes rather than cuts.
The Fed is expected to hold rates steady at 3.5%-3.75% at its June meeting.
