Cleveland Fed president Loretta Mester predicts smaller rate hike for December

Cleveland Fed President Loretta Mester said the Federal Reserve could transition to smaller interest rate hikes beginning next month as it fine-tunes its policy moves to help bring down excessive inflation while keeping the economy going.

According to the New York Post, the Fed increased interest rates earlier this month by 75 basis points for the fourth consecutive meeting. However, since then, a steady stream of policymakers have indicated that they anticipate switching to smaller increases in borrowing costs going forward to give the economy time to adjust to the quickest tightening of monetary policy in 40 years.

Mester stated, “I think we can slow down from the 75 at the next meeting. I don’t have a problem with that, I do think that’s very appropriate. But I do think we’re going to have to let the economy tell us going forward what pace we have to be at.” Mester also noted that the Fed is currently in a more “deliberate” and “judicious” phase of determining its next course of action as it assesses whether recent encouraging inflationary signs mark the beginning of sustained improvement back toward the central bank’s 2% goal. 

However, she cautioned that the Fed should be ready to act if price pressures do not sufficiently abate. She explained, “Right now my forecast is that we’re going to see some real, good progress on inflation next year. We won’t be back to 2%, but we’ll see some meaningful progress next year. But if we don’t see that, then we’re going to have to make sure our policy really reacts to the incoming information. So I can’t tell you today what the path going forward will be.”

The benchmark overnight lending rate set by the central bank is currently within a target range of 3.75%-4%. Most investors anticipate that the Fed will raise rates by 50 basis points at its upcoming policy meeting on December 13 and 14.

About The Author:

Share this post:

Facebook
Twitter
Reddit
Telegram
LinkedIn
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x

Join the Alternative Movement

Subscribe to our newsletter to stay up to date on all the news of the day!

 

BRAND OUTREACH

Interested in potentially becoming a sponsor or advertising on our platform?
Please include the relevant details below, and we will reach out to you!

WHAT ARE YOU INTERESTED IN?

DISCOVER THE ALTERNATIVES

PLAYLIST OF THE MONTH

OUR PODCAST PARTNERS
IN one SINGle PLAYLIST

SPOTIFY
PLAYLISTS