On Friday, Cleveland Fed Chairman Mestre said the possibility of raising interest rates by 75 basis points in September was back on the agenda, Zhitong Financial APP learned.
Speaking at the ECB meeting, Ms Mestre said she expected the Fed to support a 50 basis point rate hike at its meetings in mid-June and late July. She points out that at that time, the Fed can examine the appropriate pace of further rate hikes on a case-by-case basis.
"if the monthly inflation readings provide convincing evidence that inflation is falling by the FOMC meeting in September, then the pace of rate hikes may slow, but if inflation fails to moderate, it may be necessary to accelerate the pace of rate hikes," Mr Mestre said.
As a result, the Fed is likely to raise interest rates by 75 basis points after its September 20-21 meeting.
Earlier this month, Federal Reserve Chairman Powell said the Fed was not actively considering raising interest rates by 75 basis points. But in an interview with Market Radio on Thursday, Powell said he did not firmly rule out such a big interest rate hike. Analysts believe it is wrong for Powell to rule out such a big rate hike because it raises questions about the Fed's willingness to regain control of inflation.
Mestre is a voting member of the Fed's interest rate committee and is considered one of the more hawkish regional Fed chairmen.
Edit / isaac