Fed's Mester: We are not in a recession now but recession rates have increased

Cleveland Fed Pres. Loretta Mester speaking and says:

• We're are not in recession right now
• Recession risks have gone up though
• There is still path to soft landing
• We have to take supply constraints as a given as they are likely to remain for some time
• I don't use yield curve as a strong indicator of where the economy is going
• Given size of balance sheet, we should discuss selling some MBS
• policy is working on the demand-side
• but that moderating demand is not yet impact inflation
• needs to see several months of inflation coming down
• Firms still struggling to find workers

The comments are similar to ones made on Tuesday. Below are some of the things Mester said during a Washington Post interview:

• she does not believe we are in a recession
• US labor market is very healthy right now
• We have not seen inflation cool at all
• Growth will be below trend this year
• The Fed is committed to bring inflation under control
• we are starting to see slow down in investment, consumer spending and housing
• Wants to see inflation to move down on a sustainable basis
• we need to make sure inflation expectations don't become entrenched
• haven't seen anything that suggests inflation even leveling off yet
• I think will see some increase in unemployment as we go through the cycle but we need that to happen to make sure we get back to price stability
• we have a narrow path to not sparking a large rising layoffs

The US stocks are trading mixed with the Dow down, the S&P near unchanged and the NASDAQ modestly higher.

In the US debt market, yields are lower in the short and then modestly higher in the long end:

• 2 year 3.055%, -1.4 basis points
• 5 year 2.792%, -3.6 basis points
• 10 year 2.688%, -1.8 basis points
• 30 year 2.978% +3.0 basis points

/inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term