FRS MAY BE FORCED TO INCREASE RATES ABOVE 3%

Take-profit.org – The Fed may be forced to raise rates to a limiting mark in order to achieve the goal of stable inflation and low unemployment, says FRB President Cleveland Loretta Mester.

The median forecast assumes that this long-term or neutral level of the federal funds rate is 3%.

Mester is a voting member of the Committee on open market operations this year, and argues that the rate will rise above 3% by 2020.

“Undoubtedly, until 2020, it is still far away, and the course of monetary policy will depend on a change in prospects,” she said, adding that inflation is unlikely to rise sharply, which will allow the Fed to raise rates gradually.