Fed Meester says inflation has not peaked and multiple interest rate increases of half a point are needed

Cleveland Federal Reserve President Loretta Mester said Friday that she doesn’t see ample evidence that inflation has peaked and is therefore on board with a series of aggressive rate hikes ahead.

“I think the Fed has shown that we’re in the process of resetting our policy to get inflation back to our 2% target. That’s the task ahead of us,” Meester said in a CNBC live interview.exchange. “

“I don’t want to declare victory over inflation until I see really compelling evidence that our actions are starting to do the work in reducing demand better with aggregate supply,” she added.

Meester spoke on the same day the Bureau of Labor Statistics reported it Nonfarm payrolls increased by 390,000 In May, most importantly, average hourly earnings increased 0.3% from the previous month, slightly below the Dow Jones estimate.

While other recent data points have shown that at least The rate of increase in inflation diminishedMeester said she’ll need to see several months in that direction before she feels comfortable.

“It is too early to say that this will change our view or my view of politics,” she said. “Problem No. 1 in the economy remains very high inflation, well above acceptable levels, and that should be our focus going forward.”

The latest data from the Federal Open Market Committee that sets the interest rate indicates that 50 basis points – or half a point – weighted price increases At the June and July meetings. Then officials are likely to assess the progress of policy tightening and other factors in the form of inflation.

But Meester said any kind of pause in rate hikes was unlikely, although the size of the increases could be reduced.

“I will attend the September meeting, if I don’t find hard evidence [that inflation is cooling]I could easily be at 50 basis points in that meeting, too. “There’s no reason we have to make the decision today. But the starting point would be do we need to do the 50 again or not, have you seen convincing evidence that inflation is on a downward trajectory. Then maybe we can go 25. I’m not in that camp that we think we are. We’ll stop in September.”

Meester’s comments were similar to what the Fed Vice Chair made on Thursday Lyle Brainardwho told CNBC that ‘It’s very hard to see the situation’ to pause price increases in September. She also stressed that eliminating inflation, which is approaching its highest levels in 40 years, is the Fed’s top priority.