Fed's Mester
Fed's Mester is on the wires saying:
- Monetary policy in good place to assess what’s next for rates
- Fed can lower rates later this year if economy performs as expected
- When Fed cuts rates will likely be at gradual pace
- If inflation doesn't fall Fed can maintain current policy
- Inflation must be moving sustainably lower to open rate cut door
- Expects to move back to 2% inflation over time
- Sees growth and employment moderating this year
- Must be attentive to risk labor market will cool faster-than-expected
- Recent news on inflation has been ‘encouraging’
- Can't be sure last stage of move to 2% inflation will be swift
- So far Red Sea trouble hasn’t rattled supply chains
- It would be mistake to cut rates prematurely
- Possible inflation may be more persistent than expected
- Wage gains still too high for getting to 2% inflation
- Higher productivity levels may change wage-inflation calculus
Mester is a voting member on the Fed this year, but will also be retiring from the Fed in July.