Loretta Mester on CNBC
Cleveland fled Pres. Loretta Mester speaking on CNBC
- Task for the Fed is to remove accommodation at pace necessary to bring inflation under control
- Situation in Ukraine adds uncertainty to economic outlook.
- Uncertainty about economic Outlook adds upside risk on inflation .
- That makes it even more important for the Fed to take action.
- Potential is that large rising energy prices, supply chain issues continue for longer. Increases chance of high inflation getting embedded in the US economy.
- Starting with 25 basis point hike and further increases in coming months puts us in a good position.
- We need to be thoughtful about situation in Ukraine, but strengthen the US economy and imbalances all point to being deliberate about removing accommodation
- inflation will likely be 3 1/2 to 4% or even higher at the end of the year
- inflation should come down but still remain high.
- We have to look at the data and using data to inform us.
- If we don't see inflation moving down by the middle of the year after rate hikes and balance sheet trimming, that would be a signal to me that we need to remove accommodation at a faster pace.
- It could very well be that interest rates need to move above the long run neutral to tame inflation.
- We could go faster in reducing balance sheet this time compared with last time.
