Cleveland Fed President Loretta Mester to step down next year, adding to series of changes at the Fed

Federal Reserve Bank of Cleveland President Loretta Mester is set to retire from her post next year, the bank announced Wednesday.

Mester, one of the US central bank’s most “hawkish” voices, is finishing her term on June 30, 2024. Hawkish is a term used to describe Fed officials who take a strong stance on combating inflation despite the downside risks to the economy.

For instance, after inflation exploded in 2021, Mester was one of several Fed officials who called for bigger rate increases once the central bank began to lift rates. In recent months, as other Fed officials said they should keep rates on hold, she was among a few others who felt there’s a bit more room to raise rates.

Regional Fed presidents serve terms that are limited by length of service and age. Mester has served in her role since June 2014 and is 65 years old.

The Cleveland Fed is now kicking off a search for Mester’s successor, led by a committee chaired by Heidi Gartland, deputy chair of the Cleveland Fed’s board of directors.

“We are committed to finding a new leader who can ensure the Bank continues to meet the high standard that President Mester has set,” Gartland said in a statement Wednesday.

Last month, ahead of the Fed’s latest policy meeting, the Cleveland Fed chief said the central bank should keep rates elevated for longer and that some further rate increases might still be needed.

“It is important to guard against becoming complacent if it takes longer and longer to achieve the Fed’s 2% goal,” she said during an event hosted by the Manhattan Institute in late October.

With the exception of the New York Fed president, regional Fed presidents vote on monetary policy decisions on an annual rotating schedule. Mester will be voting at meetings beginning in 2024 through her retirement.

Mester’s announcement comes after a series of changes at the Fed. Esther George, the former president of the Kansas City Fed, also faced mandatory retirement at the start of this year and was replaced by Jeffrey Schmid. Earlier this year, James Bullard, then-president of the St. Louis Fed, announced he was stepping down. And in September, Adriana Kugler joined the Fed Board of Governors after previously serving as the US executive director at the World Bank Group.

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