Mester Calls for Rate Hike as Inflation Remains Above Target

Loretta Mester, former President of the Federal Reserve Bank of Cleveland and recipient of the New York Association for Business Economics' William F. Butler Award, emphasized the need for a rate hike at the upcoming Federal Open Market Committee (FOMC) meeting. With inflation remaining above 2% for over five years, she argued that it's essential to take action to bring down inflation.

Mester expressed concern about being complacent and allowing inflation expectations to remain well-anchored at a level consistent with 2%. She stated, 'I'd be a little worried about being complacent that if the Fed doesn't address actual inflation, that those inflation expectations will remain well anchored at a level consistent with 2%.'

In an interview before the release of the August producer price report and consumer price report, Mester noted that the FOMC's decision should not be solely dependent on these data points. She emphasized that policymakers would consider all the data that has come in since their last meeting.