Fed Likely to Hike Rates Above 5%

By Ann Saphir(Reuters) — The U.S. Federal Reserve is likely to need to lift the benchmark rate above 5% and keep it there to squeeze too-high inflation out of an economy where the labor market remains strong even after nearly a year of the most aggressive round of Fed rate hikes in 40 years.That was the betting in financial markets on Friday after the U.S. Labor Department reported employers added more than half a million jobs last month, far more than expected, and the unemployment rate fell to 3.4%, the lowest in more than 50 years.That was also how San Francisco Fed President Mary Daly saw it.In December Fed policymakers thought they would likely need to lift rates to at least 5.1% …