Fed’s Mester: Expect Unemployment Rate at 5.5% by 2015 End

The Federal Reserve needs to change its forward guidance on interest rates, a top official at the central bank said on Thursday, in order to better reflect the speed of the Fed’s progress toward its economic goals.

“I believe it is again time for the Committee to reformulate its forward guidance,” said Cleveland Fed President Loretta Mester, referring to the Federal Open Market Committee.

In her first speech since taking the helm at the Cleveland Fed in June, Mester said inflation signs are encouraging, and that the Fed should expect wages to rise with prices, rather than lead price gains.


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