Cleveland Federal Reserve Bank President Loretta Mester on Tuesday said she would like to raise interest rates to about 2.5 percent by year end, with bigger rate hikes in the first half, and further tightening next year to bring down high inflation and keep it from getting entrenched.
“I find it appealing to front-load some of the needed increases earlier rather than later in the process because it puts policy in a better position to adjust if the economy evolves differently than expected,” Mester said in remarks prepared for delivery at John Carroll University. “If by the middle of the year, inflation is not beginning to moderate, we could speed up our rate increases. But if inflation is moving down faster than expected, we could slow the pace of rate increases in the second half of the year compared to the first half.”
