At their March policy meeting, most Fed policymakers signaled they expected to need to raise rates one more time, to 5.1%, and not to cut them until 2024. Mester has said she still sees "somewhat more persistent" inflation than the median forecast of her colleagues. On Wednesday, Mester noted that the Fed does not yet know the duration or magnitude of the recent banking turmoil which saw the collapse of two U.S. regional banks and the rushed takeover of Credit Suisse, adding to uncertainty on the economic outlook. However, she noted too that bankers were telling policymakers credit quality remains fine even as they prepare for an economic slowdown. (Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum)
April 5 (Reuters) - Cleveland Federal Reserve Bank
President Loretta Mester said on Wednesday it was too early to
know if the U.S. central bank would need to raise its benchmark
interest rate at its next policy meeting in early May.
Her comments, in an interview with Bloomberg TV, came a day
after she gave a speech in which she said she saw the Fed's
policy rate "moving above 5% and the real fed funds rate staying
in positive territory for some time."
The Fed in late March raised rates by a quarter of a
percentage point, to between 4.75% and 5%, but indicated it was
near its peak rate after banking sector troubles raised
expectations of a further tightening in financial conditions as
lending standards become stricter.
Mester and her fellow policymakers are trying to bring high
inflation back down to the Fed's 2% target rate without causing
a recession.
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