The US Federal Reserve needs to act aggressively to reduce high inflation by raising interest rates by leaps and bounds in the first half of this year and starting to cut its balance sheet, Cleveland Fed Bank President Loretta Mester said on Wednesday.
“I would like some of them to be done early,” Mester told reporters when asked about the course of interest rate hikes this year. “I think it’s important to start raising this interest rate and I think that puts us in a better position than to do it later, thinking about what could happen in the second half of the year.”
“Mester said on Tuesday that interest rate hikes of half a percentage point should not be out of the question and noted that about 2.5% is the appropriate level by the end of 2022 and that this limit would require.” some “such interest rate increases.
Mester also told reporters that there was no obstacle to the US Federal Reserve raising interest rates and starting to cut its balance sheet at the same policy meeting. Fed Chairman Jerome Powell said last week that action to begin cutting the balance sheet could be taken as early as the next policy meeting on May 3-4.
Source: Capital
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