Comments from the Cleveland Fed President:
- In the absence of inflation or financial stability risks, Fed won't react to strong employment market
- Forward guidance is entirely consistent with revised monetary policy strategy
- Supply disruptions may take some time but forces that have weighed on inflation are still present
- Expects Fed to be deliberately patient
- Wouldn't consider the increase in inflation expected this year to be the type of sustainable increase needed to meet the Fed's forward guidance threshold
- Needs to see more labor market improvement before she would consider the conditions on QE to be met
- Valuations in real estate markets are elevated
- Sees overall financial stability risks as moderate
- Factors weighing on labor supply will diminish
- Sees unemployment at 4.5% at year end
For me these are telling comments. Mester is a hawk and she's not backing down by an inch on Powell's plan to move slowly.
