According to Cleveland Federal Reserve (Fed) President Loretta J. Mester, inflation remains a challenge that the Fed needs to overcome, but rate cuts should resume later this year as long as the data gives the Fed enough room to operate.

Key highlights

• We cannot rely on the pace of disinflation last year to continue this year.
• Demand will moderate, and growth this year will not be as strong as last year.
• Expects a slowdown in employment growth.
• A slowing of employment growth is what the Fed needs to see in order to ease rates.
• Three rate cuts this year feels about right.
• Fed is in a really good spot, both on policy and the US economy.