SAN FRANCISCO - Cleveland Federal Reserve Bank President Loretta Mester on Thursday repeated her call for further U.S.-interest rate hikes now that the economy has reached full employment and inflation is nearing the Fed's 2-percent goal.
"I think that it’s important for the FOMC to remain very vigilant against falling behind, especially given the low level of interest rates and the large size of our balance sheet," Mester said, referring to the Fed's rate-setting Federal Open Market Committee. Mester said that while the Fed need not raise rates at every meeting, it should raise rates more than once this year.
Mester is not a voter this year on policy, and in Thursday's comments largely repeated views she has held for some time.
She said she is comfortable with the Fed beginning to trim its $4.5 trillion balance sheet this year, and that once the Fed has detailed its plan to reduce its holdings, it should stick to the plan and rely only on short-term rate policy to manage its response to changing economic conditions. REUTERS