Federal Reserve Bank of Cleveland President Loretta Mester speaking in an interview with CNBC.
- a lot of the increase inflation is tied to COVID-19, whether it's to demand or supply
- as asset purchases wind down, will have time to assess inflation, employment
- says she revised up inflation forecast for this year
- she expects bottlenecks to last longer than originally expected
- will see inflation readings come back down next year
- if we don't see inflation coming down next year, will need to reassess
- says baseline forecast is for inflation to come down, but there are upside risks
- says so far medium and longer run inflation expectations are consistent with 2% inflation goal
- some house price increases are a covid effect; not a reason to change monetary policy
- we've met test for taper
- fed policy is well-calibrated to outlook
- very comfortable with where policy is right now
- banking system is quite healthy
- Q3 GDP will be weaker than 1h, but still expect US GDP to grow 5% to 6% this year
