Investing.com – “The latest inflation report is disappointing,” Cleveland President Loretta Mester said Friday, commenting on consumer spending data, but said the U.S. Federal Reserve was not yet ready to say what to do next.

Meanwhile, Chicago Fed President Austin Goolsby declined to say whether he would support a rate hike at the next Fed meeting on Sunday, June 13-14, noting that the full impact of the central bank’s rate hike has not been fully felt.

“The combination of rising inflation and very strong consumer spending will increase the likelihood that the Fed will raise interest rates again in mid-June,” said Cathy Postanczyk, chief economist at Nationwide Life Insurance.

“It will take some time to move them after the pause,” said Derek Tang, economist at LH Mayor/Monetary Policy Analysis, which on Friday raised its forecast for peak interest rates to 5.6% from 5.1%. June, but that raises the possibility of another hike after that.. Incoming data is strong, with the next hike coming in July instead of September.

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The central bank has a lot of work to do

“It’s probably not a foregone conclusion what that will be,” Meister said in an interview with CNBC when asked if another rate hike would be warranted at the FOMC meeting scheduled for June 13-14. But he added that Friday’s data confirmed the central bank has more work to do to get inflation back to its 2% target.

“Now, when I look at the data and what’s happening with the inflation data, I think we need to tighten,” Mester added.

“We’ve moved on; now it’s a ‘calibration’ process, and that’s the hardest part.”

Meester was interviewed by CNBC following the release of data showing that the central bank’s preferred ratio measure, the consumer spending price index, rose year-over-year in April instead of falling.

Mester cautioned that the central bank still needs to see more data before making its decision in June. “We have two and a half weeks ahead of us, and as I mentioned, some of this data is going to be very important data,” he said.

However, Mester noted that “everything is on the table” when the FOMC meeting takes place.

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The central bank is waiting for the data

Chicago Federal Reserve President Austin Goolsby on Sunday welcomed news of an agreement to suspend the U.S. debt ceiling, saying failure to reach an agreement would be “very negative” for the financial system and the economy.

During a televised interview, Goolsby declined to reveal whether he would support raising interest rates at the next Fed meeting on June 13-14, noting that the full impact of the Fed’s interest rate hike has yet to be fully felt.

“I’m trying to establish a policy of not feeding prejudices and making decisions when we’re weeks away from the date of the meeting,” Goolsby explained, adding, “We’ll get a lot of important data between now and the date of the meeting.”

Goolsby said there was already “fear and uncertainty” about interest rates, which the central bank has raised by a full five percentage points from March 2022.

“It could take months or even years for the Fed’s actions to have an impact on the financial system,” Goolsby said, adding, “There’s no doubt that inflation is still high, and we’re trying to manage that.”

After more than a year of aggressive rate hikes, central bank officials have indicated they could stand at their current federal funds rate target of 5%-5.25% while assessing how their past actions will affect the economy.

However, silver’s inflation data challenged their view that price pressures are moving back towards 2%, which puts June’s rate hike back on the table and could indicate that the central bank will need to raise rates further over time.