Cleveland Fed President Mester said the Fed should continue raising interest rates to keep inflation under control. He reiterated his preference to raise the Fed to “slightly” above 5% and keep it there for the time being.
In an interview with CNBC on the 24th, the governor said, “We need to do a little more to get the inflation rate back to 2%.” We will set policies to do what needs to be done,” he said.
Mester reiterated that there was a good argument for a 0.5 percentage point hike at the FOMC’s last meeting. He didn’t go so far as to say he should consider a rate hike of more than 0.25 percentage points at the next meeting in March, but said, “That’s a tactical decision at the meeting.”
Cleveland Fed President Says 50bp Rate Hike Was ‘Persuasive’ at Last Meeting (2)
He also explained that his forecast for the peak of policy rates in December was “slightly above” the median 5.1% for FOMC participants, and said that his perceptions had not changed much since then. rice field.
“We strongly believe that in order to sustainably reduce inflation to 2%, we need to raise rates slightly above 5% and hold them there for some time,” Mester said. The president will not have a vote at this year’s FOMC meeting.
The U.S. economy is still expected to grow slower this year, but the Fed can keep pushing prices down without triggering a recession, he said. “I think it’s possible to achieve both in the current labor market,” he said.
news-rsf-original-reference paywall">Original title:Mester Says Fed Must Do ‘A Little More’ to Tame Inflation(excerpt)