BlockBeats News, September 23rd — Cleveland Fed President Mester said on Monday local time that the Fed needs to be “very cautious” in lifting its restrictive monetary policy as inflation remains above the Fed’s 2% target and remains stubborn. “I think we are very close to the neutral interest rate. If we remove this constraint on the economy, I am worried that it will overheat again,” Mester, one of the most hawkish officials, has no voting rights this year, and she did not explicitly state whether she supported last week’s rate cut.
She emphasized that inflation is still a major concern for her, and the labor market is still close to the Fed’s maximum employment goal. Mester expects the unemployment rate to rise slightly this year, but then fall again shortly.
Mester said, “In terms of inflation, we are much further away from the target, missing it by a full percentage point. And we have not met the target for four and a half years in a row, and we are expected to continue to deviate in the coming years.” (FXStreet)
