Fed’s Mester: It will take longer to gain confidence inflation moving towards 2%

• Monetary policy is well positioned as the Fed reviews more data
• Risks to inflation side of the mandate have increased
• Downside risks to growth and hiring have fallen
• Expects gradual progress on lowering inflation
• Labor market conditions are strong
• Current policy will lower inflation
• Welcomes the latest CPI data as a sign of cooling inflation

These are by-the-book comments as the Fed continues to push the narrative of higher-for-longer rates. But the market is trying to get ahead of them, sensing some weakening of the economy and a potential pivot to cuts.

This article was written by Adam Button at www.forexlive.com.