Fed’s Mester expects more rate hikes this year

Economy 5/18/2017, 8:55 PM
Fed’s Mester expects more rate hikes this year

President of the Federal Reserve Bank of Cleveland Loretta Mester underlined on Thursday the need for further policy tightening provided that economic conditions develop as forecasted.

Addressing the Economic Club of Minnesota, Mester voiced the opinion that the Fed should move to introduce "more than the one-increase-per-year seen in the past two years." She cautioned against the scenario in which the Fed would wait for too long to take further steps to normalize the policy as that could make the American labor market "unsustainably tight" and price pressures excessive.

The Fed would then need to catch up the pace by increasing the rates sharply, which could end in a recession, which would again deliver the toughest blow to the more vulnerable parts of the American society, she warned.

TeleTrader Newsroom / KV