Cleveland Fed President Loretta Mester speech to
Massachusetts Institute of Technology (from prepared text)
- further rate hikes will be needed, will need restrictive stance for some time
- in uncertain environment, it can be better to act more aggressively
- pre-emptive action can prevent worst-case outcomes
- will be very cautious, will need several months of declines to conclude inflation has peaked
- will guard against being complacent that longer-term inflation expectations are well-anchored
- costs would be high if we were to fail to take decisive action
- unacceptably high inflation is key challenge facing economy
- price stability is necessary to ensure healthy labor market conditions
- fed committed to using its tools to bring inflation back down to 2% goal, will be resolute
- energy prices could move higher again; rent, shelter costs will likely keep inflation elevated for some time
- inflation pressures remain intense, wage pressures are contributing
- not clear that longer-term inflation expectations won't move up again
- large and rising level of dispersion suggests inflation expectations not as well anchored as would hope
more to come
"Pre-emptive" action. FFS these Fed parrots were screaming 'transitory' for months and months. We got denial, not pre-emptive. Now they appear to be going in the same but opposite direction. As signs emerge of inflation pressures dribbling lower they are still promising further aggressive hikes. If you have a curve you can be sure the Federal Reserve is well behind it.
