Mester: No ‘compelling’ reason to wait and see before raising rates

In an interview with the Financial Times, Fed Mester pushed back against recent suggestions from some policymakers that the central bank should forego raising interest rates at its next meeting in June. . She said there was no “compelling” reason to wait and see if economic data confirmed that more must be done to rein in U.S. inflation. Make the case for raising (interest rates) more compelling, and then hold off on raising rates for a while until uncertainty about the direction of the economy is reduced. The only reason not to raise rates when further tightening is clearly warranted is extreme market volatility or some other shock, such as a possible U.S. debt default. But a tentative deal on the U.S. debt ceiling, reached over the weekend, had “alleviated a major uncertainty” in the economy.