Cleveland Fed president, Loretta Mester, remarks to CNBC
- The virus is really driving things
- Businesses have tempered hiring as virus cases have been increasing
- High frequency data shows economic activity has slowed down a bit
- Fed goal is still for 2% inflation
- But new strategy is to allow higher inflation after period where inflation is low
- There is no mathematical formula
- The strategy is about stabilising inflation expectations
This isn't much of anything new that the Fed has communicated since last month - similar to the minutes last week - and the point on inflation echoes from Powell yesterday.
As for the part on deriving inflation, it essentially translates to "we will make it up as we go along and communicate policy changes as we see fit".
