Federal Reserve official: Rate hikes have begun to quell US inflation

Growing evidence that high inflation is finally easing shows that the Federal Reserve’s sharp interest rate hikes are working as intended, says Loretta Mester, a key Fed policymaker. But further rate hikes are still needed, she says, to decisively crush the worst inflation bout in four decades.

“We’re beginning to see the kind of actions that we need to see,” Mester, president of the Federal Reserve Bank of Cleveland, says in an interview with The Associated Press. “Good signs that things are moving in the right direction… That’s important input into how we’re thinking about where policy needs to go.”

Other Fed officials, too, have said recently that they were encouraged by a series of milder readings on inflation and wage growth. But Mester’s comments are notable because she is among the more consistently hawkish members of the Fed’s 19-person interest-rate-setting committee. (“Hawks” typically support higher rates to fight inflation, while “doves” tend to favor lower rates to boost employment.)