Cleveland Fed Pres. Loretta Mester
Cleveland Fed Pres. Loretta Mester speaking and says:
- We're are not in recession right now
- Recession risks have gone up though
- There is still path to soft landing
- We have to take supply constraints as a given as they are likely to remain for some time
- I don't use yield curve as a strong indicator of where the economy is going
- Given size of balance sheet, we should discuss selling some MBS
- policy is working on the demand-side
- but that moderating demand is not yet impact inflation
- needs to see several months of inflation coming down
- Firms still struggling to find workers
The comments are similar to ones made on Tuesday. Below are some of the things Mester said during a Washington Post interview:
- she does not believe we are in a recession
- US labor market is very healthy right now
- We have not seen inflation cool at all
- Growth will be below trend this year
- The Fed is committed to bring inflation under control
- we are starting to see slow down in investment, consumer spending and housing
- Wants to see inflation to move down on a sustainable basis
- we need to make sure inflation expectations don't become entrenched
- haven't seen anything that suggests inflation even leveling off yet
- I think will see some increase in unemployment as we go through the cycle but we need that to happen to make sure we get back to price stability
- we have a narrow path to not sparking a large rising layoffs
The US stocks are trading mixed with the Dow down, the S&P near unchanged and the NASDAQ modestly higher.
In the US debt market, yields are lower in the short and then modestly higher in the long end:
- 2 year 3.055%, -1.4 basis points
- 5 year 2.792%, -3.6 basis points
- 10 year 2.688%, -1.8 basis points
- 30 year 2.978% +3.0 basis points