- Fed’s Mester: I don't think 50 bps rate hike should be off the table
Market news
Fed’s Mester: I don't think 50 bps rate hike should be off the table
“I think we will need 50 bps at some meetings, based on my forecast,” said Cleveland Fed President and FOMC member Loretta Mester.
Additional comments
We really need to get inflation under control.
Getting inflation under control is the best thing we can do to make sure healthy labor markets continue.
Important to use both of our tools to get inflation on a better trajectory.
Balance sheet won't be main tool to fight inflation, but we will 'do what we need to do' to reduce it.
Aim is to be nimble and hit goals of full employment, stable prices.
Under some dire scenarios, not base case, Ukraine conflict could hit US growth, but right now inflation is the bigger concern.
Financial markets are supportive of Fed's getting inflation under control.
In the old days monetary policy wanted to surprise people; these days we are trying to be transparent.
Constrained supply, excess demand for labor is pushing up on inflation, can't be complacent.
Market reaction
Fed’s Mester joins other hawks in the monetary policy board to support the strong US Treasury yields, recently poking a three-year high. However, neither the US dollar nor equities match the bond moves.
Read: Forex Today: Dollar gives up despite worrisome developments
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