Federal Reserve (Fed) Bank of Cleveland President Loretta Mester told the Financial Times on Monday that markets are a 'bit ahead' of the Fed on rate cuts, per Reuters.

"The  next phase is not when to reduce rates, even though that’s where the markets are at," Mester added and said that the next phase will be about how long they need monetary policy to remain restrictive.

Market reaction

The US Dollar (USD) Index, which tracks the USD's performance against a basket of six major currencies, edged slightly higher following these comments. At the time of press, the index was virtually unchanged on the day at 102.56.