By early next year, US benchmark interest rates will have been raised by the Federal Reserve to above 4%. This is what Loretta Mester, president of the Cleveland Federal Reserve, said.
“My view at the moment is that it will be necessary to bring fed funds rates above 4% by the end of next year to stay at that level,” Mester said, according to excerpts from a speech. in Dayton.
This means that, according to Loretta Mester, Jerome Powell’s Fed will not cut rates throughout 2023. At the moment, US rates are in the range between 2.25% and 2.50%, after the Fed decision last July 27, with which Powell & Co announced a monetary tightening of 75 basis points for the second consecutive time, to curb the inflation race.
The rates on US fed funds have reached a record since the end of 2018. Loretta Master is a voting member of the FOMC, the monetary policy arm of the US central bank in charge of determining rates.