MNI BRIEF: Fed's Mester Sees 2022 Hike, Inflation Goals Met

Federal Reserve Bank of Cleveland President Loretta Mester has penciled in a 2022 interest rate increase, saying the economy has met the Fed's inflation goals for liftoff and is likely to see maximum employment by the end of next year.

"The number of payroll jobs and the labor force participation rate are still well below where they were prior to the pandemic, and unemployment rates are still well above their pre-pandemic levels. But as the recovery continues, labor markets will continue to improve, and I expect that the conditions for liftoff of the fed funds rate will be met by the end of next year," she said in remarks prepared for an Ohio bankers meeting.

She sees the unemployment rate falling to 4.75% by the end of this year and to about 4% by the end of next year. Mester, an FOMC voter in 2022, is among 9 FOMC officials who said this week that a rate hike would be appropriate by December 2022.