Fed Officials Call for Sustained High Rates to Ensure Inflation Falls, Though Investors Expect Cuts Soon
• The Fed has slowed inflation but must decide if current interest rates are too high or will curb further declines • New York Fed President Williams believes rates should stay restrictive to ensure inflation falls to 2% target • Cleveland Fed President Mester agrees rates likely need to stay elevated, December CPI rise shows more progress needed • Investors expect rate cuts to begin in March but Mester says that is probably too soon without clear inflation declines • Richmond Fed President Barkin also wants broader evidence of cooling inflation before changing policy course