Fed's Loretta Mester Sees No Compelling Reason To Pause Rate Hike: 'We May Have To Go Further'

Cleveland Federal Reserve President Loretta Mester reportedly said there was no "compelling" reason to wait before implementing another interest rate hike if economic data confirm more needs to be done to rein in inflation.

In an interview with Financial Times, Mester countered recent suggestions from some policymakers who argued the Fed should skip a rate hike at its June meeting.

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"I don't really see a compelling reason to pause — meaning wait until you get more evidence to decide what to do," Mester said. "I would see more of a compelling case for bringing [rates] up . . . and then holding for a while until you get less uncertain about where the economy is going."

Mester, who is considered to be a hawk, indicated she was disappointed at the progress on containing price pressures so far. "I just think that we may have to go further," she said. "At this point, I don't really necessarily see a compelling reason that we wouldn't want to take another small step to counter some of that really embedded, stubborn inflationary pressure."

The central banker's comments come at a time when there is a tense debate among officials over whether the Fed has squeezed the economy enough to bring inflation down.

Debt Ceiling: Mester said the debt ceiling agreement "relieve[s] a big piece of uncertainty about the economy."

In a win for House Speaker Kevin McCarthy, the debt ceiling bill surpassed an important hurdle on Tuesday evening as the powerful House Rules Committee voted seven to six to advance the bill to the floor.

The bill will hit the floor Wednesday for debate and a final passage vote before it goes to the Senate.

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