Central Banks
Fed’s Mester Backs Rates Above 4% Early Next Year, No 2023 Cuts
- Official sees unemployment rate rising above 4% this year
- She forecasts inflation moving to 5% to 6% by year end
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The Federal Reserve needs to raise its benchmark rate above 4% by early next year and leave it there for some time to help cool inflation, Cleveland Fed President Loretta Mester reiterated on Wednesday, making it clear she doesn’t expect the central bank to cut rates in 2023.
“My current view is that it will be necessary to move the fed funds rate up to somewhat above 4% by early next year and hold it there,” Mester said Wednesday in remarks prepared for an event organized by the Dayton Area Chamber of Commerce. “I do not anticipate the Fed cutting the fed funds rate target next year.”