Cleveland Federal Reserve President Loretta Mester said on Tuesday that she is likely to favor an interest rate hike at the next meeting if the current economic situation holds, as reported by Reuters.

Key takeaways

"Long-term yield rise will affect monetary policy outlook."

"Higher long-term rates will moderate growth."

"Fed likely at or near peak for interest rate target."

"Expecting to hit 2% inflation by end of 2025."

"Not seeing rate cuts happening any time soon."

"Yields are up on a number of factors, including changed outlook on growth."

Market reaction

The US Dollar Index edged slightly higher after these comments and it was last seen rising 0.15% on the day at 107.20.