Investing.com – Progress has been made on inflation, but more progress is needed before lowering interest rates, according to Loretta Mester, president of the Federal Bank of Cleveland.
In an interview with CNBC, Loretta Mester said the latest inflation data was good news and that the economy was starting to see inflation fall again after stagnating at the start of the year.
However, “we need to see inflation fall further from current levels,” she added, and she would like to see a few more months of falling inflation before interest rates are changed. appropriately.
Data released on Thursday showed that was significantly below analysts’ expectations, falling 0.2% in May on a monthly basis, while increasing just 2.2% year-on-year. This data follows Wednesday’s weaker than expected reading.
That said, Ms Mester was keen to stress that it was important not to wait too long before cutting interest rates, as “it is clear that monetary policy affects the economy”.
“We are in a good position with monetary policy,” she added, and the “FOMC is doing a good job of understanding and forecasting the economy.”
The Federal Reserve kept interest rates unchanged at its last meeting earlier this week, but the June dot plot – a set of forecasts from FOMC officials – showed a median projection of a rate cut in 2024 , unlike the two declines expected by the consensus and the three declines forecast in April.
