Fed should keep raising interest rates, Mester says
"I think that it’s important for the FOMC to remain very vigilant against falling behind, especially given the low level of interest rates and the large size of our balance sheet," Mester said, referring to the Fed's rate-setting Federal Open Market Committee. Mester said that while the Fed need not raise rates at every meeting, it should raise rates more than once this year.
Mester is not a voter this year on policy, and in Thursday's comments largely repeated views she has held for some time.
She said she is comfortable with the Fed beginning to trim its $4.5 trillion balance sheet this year, and that once the Fed has detailed its plan to reduce its holdings, it should stick to the plan and rely only on short-term rate policy to manage its response to changing economic conditions.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)