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Fed’s Mester said she saw a ‘compelling’ case for half-point hike at January meeting

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Cleveland Fed President Loretta Mester said Thursday that she would have liked the U.S. central bank to have been more aggressive at their last interest-rate committee meeting in January.

In a speech to the University of South Florida Sarasota-Manatee College of Business, Mester said she has not changed her view that the Fed needs to get its benchmark rate above 5% and hold it there for some time to get inflation under control.

“Indeed, at our meeting two weeks ago, setting aside what financial market participants expected us to do, I saw a compelling economic case for a 50-basis-point increase, which would have brought the top of the target range to 5 percent,” Mester said.

Mester did not have a vote at the Jan. 31- Feb.1 policy meeting. The committee voted unanimously to raise its benchmark interest rate by 25 basis point to a range of 4.5 to 4.75%.

Mester said that there has been some moderation in inflation readings since the summer but the level of inflation is still too high.

She said the January CPI report showed no improvement in underlying inflation.

“The report provides a cautionary tale against concluding too soon that inflation is on a timely and sustained path back to 2%,” she said.


were set to open lower on Thursday and yields on the 10-year Treasury note
rose to 3.83% in the wake of Mester’s remarks. 


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