A gradual increase in interest rates is the best way to deal with inflation and support the U.S. economy, Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland, told CNBC Thursday.
"I think a gradual path is the best strategy we have for prolonging the expansion," she said.
"Obviously we want to be responsible to changes in the economic outlook and as data comes in we are always revising the outlook," Loretta, a non-voting member of the Fed, said, mentioning she looks at inflation and inflation expectation numbers.
In October, the Federal Reserve said the U.S. economy had been expanding at a steady pace and suggested that another rate hike could take place in December.
The central bank has also began rolling off its $4.5 trillion balance sheet under its quantitative easing program, in an attempt to normalize monetary policy.