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MNI: Fed’s Mester Says Bigger Risk Is Tightening Too Little

(MNI) WASHINGTON

Cleveland Fed President is still not convinced inflation is on a steady path lower.

There is still a high risk of U.S. inflation rising further or remaining stubbornly high and the Federal Reserve should err on the side of tightening too much, Cleveland President Loretta Mester said Thursday.

“Despite the moves we have made so far, given that inflation has consistently proven to be more persistent than expected and there are significant costs of continued high inflation, I currently view the larger risks as coming from tightening too little,” Mester said in prepared remarks to the Princeton Bendheim Center for Finance.

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There is still a high risk of U.S. inflation rising further or remaining stubbornly high and the Federal Reserve should err on the side of tightening too much, Cleveland President Loretta Mester said Thursday.

“Despite the moves we have made so far, given that inflation has consistently proven to be more persistent than expected and there are significant costs of continued high inflation, I currently view the larger risks as coming from tightening too little,” Mester said in prepared remarks to the Princeton Bendheim Center for Finance.

Keep reading...Show less