Mester says PCE shows Fed has ‘more work to do’ on interest rates

Cleveland Federal Reserve President Loretta Mester said high inflation and strong consumer spending are sign the central bank likely needs to raise interest rates again to try to get prices under control. “The data coming in this morning suggest we have more work to do,” she said in an interview Friday on CNBC. The PCE price index showed inflation stuck near 5%, well above the Fed’s 2% target, while consumer spending picked up. Mester has previously said she thinks rates need to go a bit higher. Other senior Fed officials appear undecided on whether to skip a rate increase at their June 13-14 meeting, increase them again, or pause for a while.