Fed official wants to see 2.5% policy rate by year end

By Ovunc Kutlu

ANKARA (AA) – Cleveland Federal Reserve Bank President Lorreta Mester said Friday she wants to see the Fed's policy rate at 2.5% by the end of this year.

"We are in a recalibration phase for monetary policy," said Mester, who has a voting right in the Federal Open Market Committee this year.

"We need to be resolute on bringing rates up to neutral ... Once at the neutral rate, the Fed will be in good position to evaluate the economy," she said.

Mester said she would support a 50 basis points of rate hike in the Fed's next meeting on May 4, but added a 75 basis points hike would not be necessary.

The Fed Chair Jerome Powell said Thursday a 50 basis points rate hike is on the table for the May meeting, adding ​​​​​​​one or more hikes of 50 basis points would also be reasonable.

Chicago Federal Reserve Bank President Charles Evans also said Tuesday the Fed could raise interest rates by 50 basis points a few times during the year, adding that hikes of more than that would not be necessary.