Cleveland Fed President signals rate hike

Cleveland Fed President Loretta Mester said the Fed will likely have to hike interest rates again and then put rates on hold “for a while” to deal with inflation. Cleveland Fed President Loretta Mester told Reuters about the U.S. Federal Reserve’s (Fed) monetary policy plan at the Jackson Hole Economic Policy Symposium. Mester said the Fed will likely have to hike interest rates again and then put rates on hold “for a while” to deal with inflation, and that she may reconsider her previous view that rate cuts could begin in late 2024. Mester said she does not want monetary policy so tight that it hits the economy, and that the Fed wants to adjust monetary policy to bring inflation to its target of 2% by the end of 2025. Mester said that rapidly rising prices are a burden on Americans. “The longer we allow inflation to remain above 2%, we are creating an increasingly higher price level,” he said. Powell: We are prepared to raise interest rates if necessary In his speech at the Jackson Hole Economic Policy Symposium on Friday, August 25, Fed Chair Jerome Powell stated that inflation remains high and that they are prepared to raise interest rates if necessary. Stating that they have tightened monetary policy throughout the past year, Powell explained that although they are optimistic that inflation will come down, inflation still remains high. Powell underlined that they intend to keep policies at a restrictive level until they are confident that inflation is moving sustainably towards the target level.