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Fed’s Mester supports taper start in Nov, sees rate hike in 2022 By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO: Cleveland Federal Reserve Bank President Loretta Mester poses during an interview on the sidelines of the American Economic Association’s annual meeting in San Diego, California, U.S., January 3, 2020. REUTERS/ Ann Saphir/File Photo

(Reuters) – The Federal Reserve should start reducing its support for the economy in November and could start raising interest rates by the end of next year should labor markets continue to improve as expected, Cleveland Federal Reserve Bank President Loretta Mester said on Friday.

The Fed said it would continue to buy $120billion of assets per month, until the economy made “substantial more progress” toward its goal of maximum employment and inflation of 2%.

Mester made the remarks in preparation for delivery at the Ohio Bankers League.

Although the Fed has raised interest rates a lot, it appears that the economy has ‘largely’ met its requirements. However, she stated that “the economy remains some distance away from full employment.” However, she said she expected the conditions necessary to increase interest rates by the end next year.

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