Fed’s Mester Says One More Rate Hike May Be Needed This Year
- Final rates call and how long Fed holds to depend on economy
- Risks include China slowdown, UAW strike and possible shutdown
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Federal Reserve Bank of Cleveland President Loretta Mester said the US central bank will likely need to raise rates once more this year and then hold them at higher levels for some time to get inflation back to its 2% target.
However, Mester said the final decision will depend on how the economy evolves, pointing to a slowdown in China, the possibility of an extended strike by members of the United Auto Workers union and a potential government shutdown as risks to the outlook for inflation and growth.