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Mester: Run-Up In Yields To Be Considered If Sustained

FED
  • Mester (’24 voter) says the Fed is at or near the peak of the rate hike cycle, a repeat of her remarks from Oct 6, whilst adding that the one more rate hike in the Fed’s dot plot is consistent with her view.
  • The run-up in yields will be considered on policy if its sustained, with higher bond yields helping moderate economic activity. This is a point made my Chair Powell yesterday.
  • “Whether the fed funds rate needs to go higher than its current level and for how long policy needs to remain restrictive will depend importantly on how the economy evolves relative to the outlook and how the risks are changing"
  • Full remarks here.

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