Loretta Mester says policymakers should raise benchmark interest rates above 5 percent this year.

In New York, Loretta Mester said the central bank would need to raise interest rates further to rein in inflation.

“How far the federal funds rate will need to rise from here and how long policy will have to remain restrictive will depend on how low inflation and inflation expectations go. Much of demand is slowing, supply issues are resolved, and price pressures are easing,” Mester said.

The central bank raised the benchmark interest rate by 25 basis points at its March meeting, raising the fed funds rate to a target range of 4.75%-5 percent.

“According to my modal projection, monetary policy is entering a slightly more restrictive territory, with the federal funds rate rising above 5 percent and the real federal funds rate this year, to keep inflation on a steady downward trajectory to 2 percent and keep inflation expectations stable,” Mester said.

Mester is not a voting member on the Federal Reserve’s 2023 committee but is a substitute.