Cleveland Federal Reserve Bank President Loretta Mester said inflation in the United States, despite recent improvements, was still too high. He also acknowledged that the labor market remains strong.
The governor spoke at a conference hosted by the Cleveland Federal Reserve Bank and the European Central Bank (ECB) on the 1st. Policymakers should look to market and economic data to see how the economy is changing in order to inform future policy decisions, according to a draft circulated in advance. No specifics were given on whether another rate hike is needed or what decision the Federal Open Market Committee (FOMC) should make at its Sept. 19-20 meeting.
“We are making some progress, but inflation is still too high,” Mester said. “The question for monetary policy is whether the current level of the Federal Funds (FF) rate is sufficiently constraining, and how to reduce inflation to the Fed’s 2% target in a sustained and timely manner. “It’s about how long it needs to stay at a restrained level,” he said.
In a speech after the release of the U.S. jobs report in August, he said the labor market was becoming more balanced, helped by the Fed’s actions, but that employment remained strong. “The policy decisions going forward will be a matter of risk management and how to manage the different costs of excessive and insufficient monetary policy tightening,” he said.
August U.S. Employment Report Increases by 187,000 – Wages Decline, Unemployment Rate Rise to 3.8% (2)
Mester will not have a vote at this year’s FOMC meeting.
news-rsf-original-reference paywall">Original title:Fed’s Mester Says Inflation Too High But Jobs in Better Balance(excerpt)
2023-09-01 15:37:00
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