Fed’s Mester: Monetary policy is in a good place. Fed can cut later this year.

Fed’s Mester is on the wires saying:

  • Monetary policy in good place to assess what’s next for rates
  • Fed can lower rates later this year if economy performs as expected
  • When Fed cuts rates will likely be at gradual pace
  • If inflation doesn’t fall Fed can maintain current policy
  • Inflation must be moving sustainably lower to open rate cut door
  • Expects to move back to 2% inflation over time
  • Sees growth and employment moderating this year
  • Must be attentive to risk labor market will cool faster-than-expected
  • Recent news on inflation has been ‘encouraging’
  • Can’t be sure last stage of move to 2% inflation will be swift
  • So far Red Sea trouble hasn’t rattled supply chains
  • It would be mistake to cut rates prematurely
  • Possible inflation may be more persistent than expected
  • Wage gains still too high for getting to 2% inflation
  • Higher productivity levels may change wage-inflation calculus

Mester is a voting member on the Fed this year, but will also be retiring from the Fed in July.

This article was written by Greg Michalowski at www.forexlive.com. Source