Fed's Mester: Further gradual rate rises will be needed

She adds:

• Further gradual rate hikes needed
• Favors a beginning to trim Fed's balance sheet in near term
• Expects 2% GDP for the next year
• Expects inflation to return to 2% target over the next year or so
• Inflation to stay below 2% for "somewhat longer"
• Won't see strong wage growth unless productivity better
• Weak inflation is problematic if it erodes expectations
• Some recent inflation weakness reflects special factors
• Expect unemployment rate to stay below 4.75%
• Attributes slow wage growth more to slow productivity growth than slack in labor market
• Strengthening business investment,activity is an encouraging sign
• Hurricane in Gulf will likely dampen growth in current quarter but add growth in subsequent quarters.