Mester: Fed interest rates are near their peak

Cleveland Fed President Loretta Mester stated that while her view on the Fed's interest rate policy still leans toward a new increase, it is a time when policymakers need to be "agile" amidst current economic uncertainties.

Speaking ahead of a meeting of the Shadow Open Market Committee, a group that frequently criticizes Fed actions, Mester said, "Regardless of the decision made at our next meeting, if the economy evolves as expected, in my view, we are likely at or near a holding point for the federal funds rate."

Stating that she anticipates interest rates will be held steady at high levels for an extended period, Mester said, "This is consistent with my own reading of economic conditions, the outlook, and the risks to the outlook."

In her speech, Mester also noted that the policy outlook could change, saying, "Whether the federal funds rate needs to go higher than its current level and how long policy needs to remain restrictive will depend significantly on how the economy evolves relative to the outlook and how the risks change."

The FOMC will hold its next meeting on October 31-November 1, and the general expectation is that it will keep interest rates steady. Mester does not have a voting right on the Federal Open Market Committee this year.

News Source: 12punto