Fed's Mester says 'a little more' needs to be done on rates

A top US central bank official said a little more remained to be done with interest rates in order for inflation to be brought under control.

In an interview with Bloomberg, Loretta Mester, the head of the Federal Reserve Bank of Cleveland, reportedly said that "[the report is] just consistent with the fact that the Fed needs to do a little more on our policy rate to make sure that inflation is moving back down.”

Mester was speaking just after the release of personal consumption expenditure price readings for January that came in comfortably above market expectations.

Furthermore, she was on record as having seen a "compelling" case for a 50 basis point rate hike, instead of 25bp, at the Fed's last policy meeting on 31-January-1 February.

On Friday however, Mester said “where we’re going is more important than what we tactically do at any one meeting.

"I don’t think we should prejudge."

Earlier, she had told broadcaster CNBC she believed that rates needed to be "somewhat" above 5% and held there for some time so as to get inflation on a sustainable path down to 2%.