May 20, 2024 18:20 GMT
Mester - Risks That Too Restrictive Have Gone Down
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Mester (’24 voter retiring in June) in a Bloomberg TV interview that she doesn’t think three rate cuts (per the March SEP median) is still appropriate:
- It’s too soon to tell what path inflation is on. The latest CPI report was welcome but still too high and risks to inflation remain tilted to the upside.
- The economy was stronger in Q1 than she anticipated
- She thinks monetary policy is restrictive but risks that we’re too restrictive have gone down.
- Monetary policy is starting to moderate demand and business contacts say they’re being more cautious. She thinks inflation will still come down but it won’t do so quickly.
- Right now monetary policy is well-positioned – can raise rates if appropriate but that’s not her base case.
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