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Central Banks

Fed’s Mester Says She Saw ‘Compelling’ Case for Half-Point Rate Hike

  • Costs of undershooting rates outweigh costs of overtightening
  • Mester says rates may need to go higher if inflation persists
Bloomberg business news
Mester Sees 'Compelling' Case for 50 Bps Fed Rate HikePhotographer: David Paul Morris/Bloomberg
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Federal Reserve Bank of Cleveland President Loretta Mester said she saw a compelling case for rolling out another 50 basis-point interest-rate hike earlier this month and the US central bank has to be prepared to move higher if inflation remains stubbornly high.

“At this juncture, the incoming data have not changed my view that we will need to bring the fed funds rate above 5% and hold it there for some time,” Mester said Thursday in remarks prepared for an event organized by the Global Interdependence Center and the University of South Florida Sarasota-Manatee.