Loretta Mester, president of the Cleveland Federal Reserve, stated on Monday that before she is ready to cease pushing for interest rate rises, inflation would need to show further signs of improvement.

The central bank official told CNBC that while recent numbers have been positive, it’s still only the beginning.
In a live “Closing Bell” interview with Sara Eisen, she remarked, “We’re going to have more work to do because we need to see inflation actually on a sustained downward path back to 2%.” “We’ve seen some good news on the inflation front, but we need to see more good news and sustained good news to make sure that we are getting back to price stability as soon as we can,” said the economist.

The Fed is expected to approve its seventh rate hike of the year in December, easing down from a series of four consecutive increases of 0.75 percentage points to this time a rise of 0.5 percentage points.

Mester declared that she agreed with the slower pace.
“We have reached the stage where we will adopt a restricted approach on policy. I believe it makes sense to slow down the pace of increases at that point, she said. The funds rate will still be increased, but we are now in a position where we can set monetary policy with great care.

Similar views have recently been expressed by a number of other Fed officials, who essentially said that while the pace can be eased a bit, tightening policy must still be maintained until inflation shows further indications of a slowdown.
The consumer price index measures inflation at a 7.7% annual pace, although data recently showed that price increases are slower than forecast, causing markets to rise. The Fed sets a 2% inflation goal.
The Fed has recently come under fire from those who believe that its emphasis on inflation could harm the economy unnecessarily. Mester claimed that the Fed is working to “as painlessly” reduce inflation.

We shouldn’t, she warned, “underestimate the long-term effects of continuing inflation on the health of the economy.”