Fed’s Goals Largely Met

The US Federal Reserve has now met its employment goal and is nearing its inflation goal, despite some weak recent economic data, so it should continue raising interest rates, Cleveland Fed President Loretta Mester said on Monday, CNBC reported. In a speech that largely reinforced her upbeat view of the US economy, Mester, a hawkish Fed policymaker, said that while risks are “roughly balanced” the central bank should not delay further policy tightening until its two key mandates are fully met. “We have met the maximum employment part of our mandate and inflation is nearing our 2% goal,” Mester, who regains a vote on the Fed’s policy committee next year under a rotation, said at the Chicago Council on Global Affairs. “Although we live in a high-frequency world, we cannot overreact to transitory movements in incoming data,” she said in prepared remarks. The comments reinforced the expectation among most investors and Fed officials that the central bank will likely raise rates another notch in June, after having tightened twice since December, and do so yet again before year end.