MNI BRIEF: Fed's Mester Wants More Disinflation, Eyes 3 Cuts
Cleveland Federal Reserve President Loretta Mester said Thursday there needs to be continued disinflation with prices moving sustainably back to 2%, but she added three 25 basis point cuts in the year "feels right" at the moment if the economy performs as expected.
"We need to be more confident that inflation is on that sustainable downward path back to 2%," she told Yahoo Finance in an interview after the Commerce Department released data showing PCE inflation rose 2.4% over the last year. "It doesn't really change my view, that inflation is going to be downward, going down to our 2% goal over time, but it does show you that there's a little more work for the Fed to do here." The Cleveland Fed president said she is expecting some moderation in demand and that growth this year will be slower than it was in 2023 at 2.5%. (See: MNI INTERVIEW: Fed To Stay Patient Given Bumpy Inflation-Groen)