Fed officials are already saying they’ll need to get back to hiking rates

Two Federal Reserve presidents on Friday said interest rates will need to move higher to rein in inflation.

The St. Louis Fed's Alberto Musalem said another rate hike will need to happen soon. And Lorie Logan of the Dallas Fed predicted that the central bank will need to raise rates by quarter-point increments at least two more times.

The comments from the two officials offer the first morsels of insight into what leaders at the Fed see next after the central bank on Wednesday elected to leave rates unchanged for now . The remarks are likely to bolster the view among investors that the Federal Open Market Committee will return to hiking rates at its next meeting in December.

Fed funds futures traders are pricing in a roughly 76% likelihood of the Fed lifting rates by a quarter percentage point at that gathering, according to CME's FedWatch tool.

"I judge that additional firming of monetary policy will be necessary, and soon," Musalem said in prepared remarks for the Shadow Open Market Committee, a gathering of economists in New York focused on the central bank.

"Incremental adjustments made earlier are usually less disruptive than larger and abrupt actions taken later," Musalem said. "Moving sooner in smaller steps while inflation expectations are anchored has a better chance of succeeding without adverse impact on the labor market or economic growth."

In remarks roughly an hour later, Logan said: "It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-basis-point rate increases."

Still, she said, that doesn't mean the Fed has to raise rates at every meeting.

"Skipping a meeting does not change the monetary policy destination," Logan told students at Davidson College in North Carolina, according to her prepared remarks. "Indeed, by making the destination clear, the FOMC can better help the economy adapt and obtain the promised benefits of a skip."

After the predicted two rate hikes, Logan said, "it would make sense in my view to pause and examine economic and financial developments to determine what further action may be appropriate."