United States Federal Reserve Bank of Cleveland President Loretta Mester stated on Friday that the main debate at the central bank at the moment is whether its restrictive policy is restrictive enough to get inflation to its target of 2%. Speaking to CNBC during the Jackson Hole Economic Symposium, Mester noted that the Fed’s forecast published in June does not predict cutting rates in 2024, underscoring that more evidence is needed to show that inflation is “cooling.” Still, she also voiced her belief that the economy is “getting close to where we need to be with rates.” Mester projected that it is “very likely below-trend growth” will be “needed to lower inflation.” She also reiterated Chair Jerome Powel’s stance on monetary policy, saying the Fed does not want to “over-tighten” the rates.
Harker: Fed to hold rates until year-end
Federal Reserve Bank of Philadelphia President Patrick Harker stated on Friday that the Fed is “clearly going to hold [rates at current levels] through the end of the year.” During an interview with Yahoo Finance on the sidelines of the Jackson Hole symposium, the banker said that rate cuts will only be considered next year, with rate hikes dependent on inflation. Finally, Harker reiterated that the Fed must maintain its tightening stance and must keep up the pressure. It will take some time to reach the inflation target.