Fed’s Mester bets on 50bp rate hikes, doesn’t expect sustained slowdown

(Reuters) – Federal Reserve Bank of Cleveland President Loretta Mester said on Tuesday that she supports half-point interest rate hikes at the bank’s next two meetings and expects them to exceed 2, 5% to reduce high inflation.

«The unemployment rate may very well have to go up a little bit, we may have another quarter of negative or slow growth, but that’s going to have to happen if we want to bring inflation down,» Mester told Yahoo Finance.

«I don’t think what is planned to be done with monetary policy, at least in my base case, is going to push the economy into a downturn that is kind of a sustained slowdown,» he added.

(Reporting by Ann Saphir, Editing in Spanish by Carlos Serrano)