It's time for rate hikes - Fed officials

Federal Reserve officials still want interest rate hikes, believing it will help the country keep up the economic growth.

According to CNN Money, Federal Reserve Bank of Cleaveland Loretta Mester believes it is about time to increase interest rates from near-zero.

In a speech Thursday night at the New York University, Mester said, "The economy can handle an increase in the fed funds rate."

"It is appropriate for monetary policy to take a step back from the emergency measure of zero interest rates," she said.

Meanwhile Reuters reported that San Francisco Fed President John Williams share the same sentiments with Mester, saying there is a need to start raising interest rates in the near future.

Even if there are factors overseas that are holding down the inflation rate in the US, the Federal Reserve should soon start the rate hikes to slow down economic growth, otherwise it will become unsustainable in the future.

The US economy is expected to grow by 2 or 2.25 percent in 2016. Williams believe this will bring the unemployment rate to 5 percent, which will later on bring inflation back to the Fed's 2 -percent goal.

Washington Post reported that higher interest rates are needed to mitigate the adverse effects of the inflation rates, which would start rising soon to its 2 percent target. It will be difficult for the economy to bounce back of the prices don't go up enough any time soon.

There are three major factors that will lead to this demise. First, unprofitable companies will cut cost, leading to laying off of employees.

Households will also cut off their expenses. This leads to worse unemployment rate. To keep up with this vicious cycle, the Fed has to increase interest rates.

Besides Mester and Williams, there are other officials who believe it's about time to increase interest rates, including St Louis Fed President James Bullard and Richmond Fed President Jeffrey Lacker.