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Mester Needs To See More Evidence Inflation On Way To 2%

FED

Cleveland Fed’s Mester (’24 voter retiring in June) says she needs to see more evidence inflation is on the way to 2% and that she’d be concerned if inflation progress stalls.

  • Talking about the prior surge in Treasury yields, she attributes them to strong data and term premium (having last month pushed back against the idea that it was led by fiscal fears as these are something that has been known for some time).
  • She doesn’t have a recession built in her forecast and notes that contacts see the economy slowing but not significantly.
  • She hasn’t decided whether another rate hike is still needed (she said in opening remarks earlier today that it will depend on the data, having pre-payrolls and CPI thought we were within 1 hike of the peak for rates) with the debate now about how long to keep rates restrictive.

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