Cleveland Fed president calls for raising interest rates above 4%

Cleveland Fed President Loretta J. Mester suggested raising interest rates to above 4% during a speech in Dayton, Ohio. The annual benchmark is between 2.25% and 2.5%. In turn, Mester does not believe that "the Federal Reserve System (Fed) will cut the rate next year."

The continued rise in the interest rate ratio will continue to increase through 2023, a fact confirmed by Mester during his appearance.

High inflation is wreaking havoc on all the scales and indicators on which the economy depends. And interest rates are one of them, as the Federal Reserve is forced to raise them in order to control it. If in June the inflation rate stood at 9.1% year-on-year, the latest data for July showed that it was 8.5%.

It will take time to control inflation

With this data, Mester was optimistic about a progressive fall in inflation. He estimated that the rate will fall to 5% or 6% before the end of the year, and that the Fed's target of 2% will be achieved in the next few years, for which he is betting on rate hikes.

For his part, the president of the New York Federal Reserve, in statements to The Wall Street Journal, considers that "the inflation rate is here to stay for at least a few years". The Federal Reserve's mission is to control inflation and improve the economy. "Clearly, we have an imbalance, where demand far exceeds supply. This is creating inflation, or contributing to inflationary pressures," Williams said.

A suggestion that runs counter to expert estimates. Three out of four economists do not believe that the Fed will succeed in improving the country's economy and lowering the inflation rate.