Saying she "could imagine" a rate hike in the first half of this year, if the variables fall into place Federal Reserve Bank of Cleveland President Loretta Mester predicted Friday inflation would "gradually" move toward the Fed's 2% target.
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Stressing an increase would be dependent on data, Mester said in a televised interview, "I do believe that inflation will gradually move back to our target, so I could imagine interest rates going up in the first half of the year."
In addition to inflation moving back to 2%, Mester said economic growth and "how close we are to our goals" will "guide policy."
Lower energy prices will keep inflation low near-term, a situation she called "transitory." Mester said she sees 3% GDP growth this year.
