Fed Mester says to expect above trend growth for the year

Federal Reserve Bank of Atlanta President Raphael Bostic (moderator), Federal Reserve Bank of Cleveland President Loretta Mester and Federal Reserve Bank of Boston President Susan Collins participate in “Central Banking in the Post-Pandemic Financial System”.

Mester says to expect above trend growth for the year

• Keeping rates restrictive is not that big a risk right now given the strength of the jobs market
• Policy is well positioned, need to monitor the incoming data

• Raised estimate of long run neutral rate in last projection, current
  level of policy may not be “as restrictive” as it might
  otherwise have been

• Need to see a few more months of inflation coming down, also watching inflation expectations

Collins says elevated uncertainty continues to be a feature of the economy, can’t overreact to any data point

• This is a period when patience really matters, uncertainty a key factor at this point
• Progress towards interest rate adjustment lower will take longer
• Businesses are cautiously optimistic as it becomes easier to hire and wage pressures fall

• A number of factors are keeping the labor market strong, but it is
  rebalancing under influence of tight monetary policy

• A lot of reasons
  to think Fed policy is “moderately” restrictive with some
  impacts still in the pipeline

• Neutral rate may be higher, at least in the medium term

None of this is coming across as dovish.

This article was written by Eamonn Sheridan at www.forexlive.com.