Fed/Mester: Fed needs to raise interest rate to just over 5 percent

Cleveland Fed Leader Loretta Mester argued that the Fed should raise the interest rate slightly above the 5.00-5.25 percent range to bring inflation to the target.

However, Mester did not disclose how many basis points he would prefer to raise rates at the FOMC meeting, which will begin on January 31 and end on February 1.

“We are not at the level of 5 percent yet, we are not above the 5 percent that you think we should be considering our projections for the economy,” said Mester.

The Fed overnight lending rate is currently 4.25-4.50%.