22 November 2022 | Other

Mester from the Fed says she supports a small rate hike in December

Cleveland Fed President Loretta Mester said Monday that the Federal Reserve could move to a smaller pace of interest rate hikes starting next month as it adjusts its measures to combat high inflation and keep the economy growing.

In an interview with CNBC, Mester said she thinks the Fed could lower the pace of rate hikes from the current 0.75% at its next meeting. She believes that the Fed should have no problem making such a decision because it is appropriate. Nevertheless, she believes that going forward, the Fed should be guided by the state of the economy when choosing the pace of the rate hike.

Mester said that the Fed is now entering a more deliberate and cautious phase in choosing its next steps. First of all, it needs to determine whether the recent upbeat inflation data shows signs of a sustained economic recovery and movement toward the central bank's 2% target. At the same time, she warned that the Fed should be prepared to take action if price pressures do not ease enough.

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