ICYMI – Fed’s Mester says forecast of 3 rate cuts this year is probably too many

Greg had Mester’s comments here:

• Cleveland Fed Pres. Mester: Monetary policy is restrictive. Neutral rate may be higher

Its worth checking the post out, Mester’s remarks are a good summary of the Fed is at right now.

Mester had 3 cuts in her forecast up until April but has now dialled that back:

“I was on the record before saying I was at the median [forecast] which was three. The developments I’ve seen in the economy right now, I would not think that that’s still appropriate,”

Mester cited (speaking on Bloomberg TV):

• inflation risks have moved up since Q1
• the real economy is “a little big stronger than I anticipated”

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the next Federal Open Market Committee (FOMC) meeting is in June, 11 and12, it’ll have an updated dot plot. The current plot has

• 10 FOMC officials had three cuts
• 9 had two or fewer

That’ll ratchet lower in June.

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