Cleveland Fed President Loretta Mester spoke with the New York Times in a Q&A article that appeared today.
Q. Has the downturn in the global economic outlook, and the strengthening dollar, changed your expectations for the domestic economy?
A. They’re risks but I haven’t really reduced my growth rates or changed my inflation outlook because of them. The appreciation of the dollar would have to be a sustained appreciation before I would want to change my outlook.
Meester comes from Charles Plosser’s Philly Fed so it’s not a big surprise that she’s a bit hawkish. She says that she’s not concerned by the gradual rise in inflation. “I’d be more disturbed by the undershoot in inflation if it starts showing up in survey measures of inflation expectations.”
