Fed’s Mester, Bullard Say U.S. Outlook Justifies Rate Hike

Two regional Federal Reserve presidents who will vote on policy next year said that while they are mindful of market volatility, they consider the U.S. economy strong enough to justify raising interest rates.

“Inflation expectations have been relatively stable, we have growth, above-trend growth, we have labor-market improvements continuing,” the Cleveland Fed’s Loretta Mester told Bloomberg Television Friday at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. “My view so far in looking at all of the factors is that the economy can sustain an increase in interest rates.”