Fed's Mester
Fed's Mester on CNBC
  • US jobs report was strong
  • We want to see some moderation activity and growth and for labor market to cool a little
  • Number 1 problem is high inflation
  • Moderation in wage growth is not a bad thing, that's a good thing
  • We want to see more consistent tempering of underlying demand
  • it would be great if we could see labor force participation move back up
  • we are on the path to bring the funds rate up quite a bit
  • Committed to using tools to reduce inflation
  • We are pace to increase rates by 50 basis points at the next 2 meetings
  • Seeing a tightening of financial conditions
  • It'll take time to get to the 2% goal on inflation
  • One compelling evidence that inflation is coming down
  • Does not see a hurricane ahead
  • Risks of recession have gone up
  • There is a good case to be made that we can moderate demand and contain price pressures
  • People who are running companies, I listen to them
  • There hasn't been a real change in the demand momentum of the economy
  • I want to see monthly numbers start to come down. It can't beat one month of numbers
  • Has not seen compelling evidence that inflation is coming down
  • She could come into September meeting and it could easily be a 50 basis point hike
  • If see compelling evidence that inflation is down, maybe could go to 25 basis point hike in September

The Fed has a convenient plan and seems to be convinced that they could impact demand and with it prices. They are resolute about trying to control inflation, but are still scared that if they go too fast, with the external issues from Ukraine war and things like Covid, they could make things worse. So they smile and talk their playbook, while their fingers are crossed under the table that there is relief in oil,  commodities  , Ukraine war, supply chain, Covid, and housing shortage is offset by higher mortgage rates and high prices.

/ inflation