The Federal Reserve will need to move more aggressively to remove accommodation than it did following the Great Recession by raising interest rates at a faster pace and shrinking its balance sheet more quickly, Cleveland Fed President Loretta Mester said on Thursday. “Barring a material change in the economy, I anticipate that it will be appropriate to move the funds rate up at a faster pace this time and to begin reducing the size of the balance sheet soon and more quickly than last time,” Mester said during a virtual event organized by the New York University Stern Center for Global Economy and Business. Policymakers are expected to start raising interest rates from near zero levels when they meet next month and to begin reducing the Fed’s nearly $9 trillion portfolio soon after. Officials are debating how quickly to raise interest rates to combat the highest inflation seen in decades. …
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