Federal Reserve Bank of Cleveland President Loretta Mester said Friday that the latest round of inflation data is good news for the economy and the central bank.
After being higher than desired at the start of the year, “it’s good to see inflation coming back down, we just need to see this continue a little bit longer,” Mester said in an interview on CNBC .
Ms. Mester, who will retire at the end of the month, spoke on the television station following this week’s Federal Open Market Committee meeting, where officials maintained the rate target central bank interest rate between 5.25% and 5.5%.
At the meeting, officials also reduced interest rate cut forecasts from three-quarters of a point this year to just one percentage point, amid forecasts that also predicted more price pressures. significant this year compared to what they announced in March. These forecasts emerged as incoming data already pointed to imminent relief in inflation, leading some to wonder whether the Fed was slow to take into account the changing dynamics of price pressures.
“I’m confident the committee is doing a good job,” Ms. Mester said. “I don’t think the discussion around the table gives the impression that we are totally out of sync with what’s happening in the market. If you look at where the market is and where our valuations are, they’ve brought closer together over time.
Mester, who last voted on the FOMC, hasn’t given much guidance on when she thinks the Fed will be able to cut rates, saying only that she would like to see “a few more months” of falling inflation data before we are convinced that price pressures are heading towards 2% again.
Meanwhile, “monetary policy is in a very good position right now” to address the risks and challenges related to the Fed’s inflation and employment mandates, Ms. Mester said.
