US Fed Officials Urge for More Rate Hikes to Keep Up with Inflation

Despite inflation showing signs of having peaked and economic activity weakening, Federal Reserve policymakers said on Wednesday that they will go through with future interest rate hikes, with several supporting a top policy rate of at least 5%.

In an interview with the Associated Press, Cleveland Fed President Loretta Mester said, “I just think we need to keep going, and we’ll discuss at the meeting how much to do.”

Her comments seemed to follow the consensus of her fellow policymakers, who as of last December had predicted a policy rate of 5% to 5.25% for the next months.

To further lower inflation, Mester believes the Fed’s policy rate must go “a bit higher” than that and remain at that level for some time.

The Fed began raising interest rates in March, when the rate was in the 0%-0.25% range and inflation was beginning to soar to 40-year highs, beyond the central bank’s 2% target.