Mester: Fed rates near peak

Cleveland Fed President Loretta Mester said she probably doesn’t expect interest rates to be raised much further from here. The Fed’s view on interest rate policy is still toward another hike, but she said this is a time for policymakers to be “nimble” amid the current economic uncertainty. “Regardless of what we decide at our next meeting, if the economy develops as expected, in my view, we are probably at or near a holding pattern in the funds rate,” Mester said, speaking before a meeting of the Shadow Open Market Committee, a group that has often criticized Fed actions. “That’s consistent with my own reading of the economic conditions, the outlook and the risks to the outlook,” she said, adding that she sees interest rates holding steady at elevated levels for an extended period. “Whether the Fed funds rate should rise higher than it is now and how long policy should remain restrictive will depend significantly on how the outlook evolves and how the risks change,” Mester said. The FOMC next meets Oct. 31-Nov. 1, and the general expectation is that it will keep rates steady. Mester does not have a vote on the Federal Open Market Committee this year.