Mester sees gradual rate increases despite weak jobs data

Bloomberg

The Federal Reserve should raise interest rates gradually despite weak jobs data, Fed Cleveland Bank President Loretta Mester said.
U.S. economic growth is picking up, inflation is moving toward target and the country is at full employment, Mester told reporters in Stockholm on Saturday.
“I still believe that in order to achieve our monetary policy goals a gradual upward pace of the funds rate is appropriate,” said Mester, a 2016 voter on the policy-making Federal Open Market Committee.
“When the rate hikes will occur and the slope of that gradual path is data dependent.”
The U.S. economy created fewer jobs in May than in any single month in almost six years. That’s fueled speculation the Fed won’t be as eager to tighten monetary policy in 2016 after raising rates late last year for the first time since late 2008 on signs the economy is picking up.
While the jobs data was a disappointment that shouldn’t be downplayed, “you can’t read too much into one number” as seasonal factors loomed large and the Verizon Communications Inc. strike affected the number negatively, Mester said.