(Bloomberg) — Federal Reserve Bank of Cleveland President Loretta Mester said the central bank needs to dial back its pandemic policy support to contain inflation and repeated that she backs raising interest rates in March.
“The case is very compelling that we remove accommodation,” Mester, who votes on the rate-setting Federal Open Market Committee this year, said during a Wall Street Journal Live event streamed on Twitter Wednesday. “We’ll also be considering what we can do with our balance sheet.”
Amid the hottest inflation in almost four decades, investors expect the Fed to raise interest rates at their meeting in March and signal a shift toward shrinking its $8.8 trillion balance sheet later in 2022. The consumer price index climbed 7% in 2021, the largest 12-month gain since June 1982, according to Labor Department data released earlier on Wednesday.
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