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Fed’s Mester Open to Faster Taper to Win Space for Rate Hike

  • Cleveland Fed chief says higher rates in 2022 may be needed
  • Regional presidents including Daly, Bostic mull faster taper
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WATCH: Federal Reserve Bank of Cleveland President Loretta Mester discusses monetary policy and the outlook for the economy.Source: Bloomberg
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Federal Reserve Bank of Cleveland President Loretta Mester said she is “very open” to scaling back the Fed’s asset purchases at a faster pace so it can raise interest rates a couple of times next year if needed.

“Making the taper faster is definitely buying insurance and optionality so that if inflation doesn’t move back down significantly next year we’re in a position to be able hike if we have to,” Mester said in an interview with Kathleen Hays on Bloomberg Television Wednesday. She said that recent data “have come in supportive of that case, so I’m very open to considering a faster pace of tapering.”