Fed/Mester: Fed needs to raise interest rates slightly above 5%

Cleveland Fed President Loretta Mester has argued that the Fed should raise interest rates slightly above the 5.00-5.25 percent range to bring inflation to target. However, Mester did not say how many basis points she would prefer to hike interest rates at the FOMC meeting that begins on Jan. 31 and ends on Feb. 1. "We are not at 5 percent yet, we are not above the 5 percent that I think we should be at given my projections for the economy," Mester said. "I think we should continue to raise interest rates and we will discuss how much to raise at the FOMC meeting." The Fed's overnight lending rate is currently at 4.25-4.50 percent.