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Nov 21 (Reuters) - The Federal Reserve can downshift to smaller interest rate hike increments from next month as it fine-tunes its policy actions to help bring down high inflation while keeping the economy humming, Cleveland Fed President Loretta Mester said on Monday.

"I think we can slow down from the 75 at the next meeting. I don't have a problem with that, I do think that's very appropriate," Mester said in an interview with broadcaster CNBC. "But I do think we're going to have to let the economy tell us going forward what pace we have to be at."

The Fed earlier this month raised interest rates by 75 basis points for the fourth consecutive meeting, but since then a steady drumbeat of policymakers have signaled that they expect to shift to smaller increases in borrowing costs from now on to allow time for the economy to absorb the swiftest tightening of monetary policy in 40 years.

The central bank's benchmark overnight lending rate currently sits in a target range of 3.75%-4.00%. Investors overwhelmingly expect a rate increase of 50 basis points at the Fed's next policy meeting on Dec. 13-14.

Mester noted that the Fed is now entering a more "deliberate" and "judicious" phase in weighing up its next moves as it sees if recent encouraging signs on inflation are the beginning of sustained improvement back toward the central bank's 2% goal, but warned that it should be prepared to act if price pressures do not sufficiently abate.

"Right now my forecast is that we're going to see some real, good progress on inflation next year," Mester said. "We won't be back to 2%, but we'll see some meaningful progress next year. But if we don't see that, then we're going to have to make sure our policy really reacts to the incoming information. So I can't tell you today what the path going forward will be." (Reporting by Lindsay Dunsmuir; Editing by Mark Porter and Andrea Ricci)