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3/30/2017, 3:54 PM (Source: TeleTrader)
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Fed's Mester says further rate hikes will be needed

The United States Federal Reserve will need to raise interest rates further, although not at each meeting this year, President of Cleveland Fed Loretta Mester said on Thursday.

The upwards policy path of increasing the federal funds rate by more than once a year as the Fed has done in the past two years will help prolong the economic expansion, not curtail it, Mester claimed during her speech at the Chicago Fed's Tenth Annual Risk Conference. She said she sees growth somewhat above the 2% trend over the next year and added that weak first-quarter figures largely reflect transitory factors and residual seasonality in the data.

The policymaker, who is not a voting member of the Fed's rate-setting committee this year, said she believes inflation in the US will return to the 2% target over the next year or so, while unemployment is likely to remain below 5% during the next two years.

Breaking the News / IB