MNI BRIEF: Mester Says Inflation Still Too High, Jobs Strong

The Fed's interest rate hikes are helping to moderate demand and alleviate some of the imbalances that have boosted price pressures but inflation is still "too high" while the job market stands strong, Federal Reserve Bank of Cleveland President Loretta Mester said Friday.

Though the Labor Department reported Friday a three-tenths jump in unemployment last month, the 3.8% jobless rate remains low, Mester said in remarks prepared for a joint ECB-Cleveland Fed inflation conference. She told CNBC at Jackson Hole last week that she had penciled in two more hikes for the year in her June forecasts and the Fed had so far delivered one of them.

"The monetary policy questions are whether the current level of the federal funds rate is sufficiently restrictive and how long policy will need to remain restrictive to keep inflation moving down in a sustainable and timely way to our goal of 2%. Future policy decisions will be about managing the risks and the intertemporal costs of over-tightening vs. under-tightening monetary policy," she said. (See: MNI INTERVIEW: Fed Probably Needs A Bit More Tightening-Aikman)