Fed's Mester sees policy rate above 4%, hikes through mid-2023
- Nasdaq closes lower as chipmaker Micron's warning renews tech rout
- Citi’s Top Equity Strategist Warns Analysts are Too Bullish on Stocks
- Bank of America Clients Continue to Buy the Rally, New Data Shows
- Novavax (NVAX) Crashes 30% After a Deep Guidance Cut, Analyst 'Frustrated'
- 'Hard to Say' Whether Current Crypto Bear Market is Over - Morgan Stanley
FILE PHOTO: Cleveland Federal Reserve Bank President Loretta Mester speaks in London, Britain, July 2, 2019. REUTERS/Marc Jones/File Photo
Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.
By Lindsay Dunsmuir
(Reuters) -The U.S. Federal Reserve should raise interest rates to above 4% to help bring inflation down and must aim to keep tightening through the first half of next year, Cleveland Fed President Loretta Mester said on Thursday.
"I would pencil in going a bit above four as appropriate," Mester told reporters following an event held at the Economic Club of Pittsburgh, in reference to the central bank's policy rate, making her one of the most hawkish members of the rate-setting committee. "It's not unreasonable I think to maintain that as where we're getting to and then we'll see."
A bevy of policymakers have this week near uniformly flagged that the central bank remains determined to press ahead with rate hikes until it sees strong and long-lasting evidence that inflation is on track back down to the Fed's 2% goal.
Mester once again repeated comments earlier this week that she'll need to see several months of monthly declines in inflation before she feels the Fed can ease up on rates and offered a more precise trajectory on how quickly she and her colleagues could get there.
"Interest rates continue to rise this year and into next year through the first half and maybe by then we can pause and we can start bringing them back down," Mester said.
On the size of rate hike needed at the Fed's next policy meeting on Sept. 20-21, the Cleveland Fed chief said she was keeping an open mind. Fed Chair Jerome Powell has already indicated it will likely be another unusually large lift in borrowing costs.
"It's not unreasonable to think we might have to do a 75 (basis point move) but I can imagine it could be a 50. We'll just have to look at the data as it comes in," Mester said.
(Reporting by Lindsay Dunsmuir; Editing by Daniel Wallis and Deepa Babington)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Unusually large U.S. jobs number stokes case for 'unusually large' rate hike
- Fed's Mester says she needs to see 'several months' of inflation easing
- Ford raises prices of electric F-150 pickup amid high commodity costs
Create E-mail Alert Related CategoriesFed, General News, Reuters
Related EntitiesJerome Powell
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!