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Fed Hiking Pace From September Hinges on Inflation, Mester Says

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Federal Reserve Bank of Cleveland President Loretta Mester talks about inflation.Source: Bloomberg

Federal Reserve Bank of Cleveland President Loretta Mester said she favors raising interest rates by 50 basis points this month and next but cautioned that pace could speed up or slow down from September, based on what happens with inflation. 

“If by the September FOMC meeting, the monthly readings on inflation provide compelling evidence that inflation is moving down, then the pace of rate increases could slow,” Mester said Thursday, referring to the policy-setting Federal Open Market Committee. “But if inflation has failed to moderate, then a faster pace of rate increases could be necessary,” she told a virtual event hosted Philadelphia Council for Business Economics, according to her prepared remarks.