Cleveland Fed President Loretta Mester said in a speech on Thursday that price stability was the Holy Grail for central banks, adding that price stability and monetary policy were intimately linked.

She also said that inflation in the U.S. rose this year.

"The headline and underlying measures of inflation have moved higher," Cleveland Fed president noted.

"As of the first quarter of this year, the year-over-year change in the headline PCE price index has risen to 1 percent from 0.2 percent in the first quarter of last year. Core PCE inflation was 1.7 percent in the first quarter, compared to 1.3 percent a year ago, and core CPI inflation was 2.3 percent compared with 1.7 percent a year ago," Mester added.