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Mester Says `Strong Case' Liftoff Conditions Have Been Met

  • Says a small increase from zero would not make policy `tight'
  • Sees growth rebound to 2.5%-2.7% range after weak 3Q
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Federal Reserve Bank of Cleveland President Loretta Mester said a strengthening U.S. economy is ready for higher interest rates as she predicted growth of 2.5 percent to 2.75 percent through the rest of this year and next year and called for a gradual path of tightening after liftoff.

“Given the economic outlook, starting the process to normalize interest rates will help ensure that we can, indeed, take a gradual approach,” Mester said, according to the text of a speech she is scheduled to deliver later on Friday to the City Club of Cleveland. “Delay risks having to move rates up more steeply in order to promote attainment of our goals over time.”