Fed's Mester : Supported FOMC Decision to Hold Rates Steady
By Michael S. Derby
Cleveland Fed leader Loretta Mester said Monday she is on board with the Federal Reserve holding off on further rate increases as it takes stock of an uncertain environment.
Referring to last week's Fed meeting that saw the central bank hold rates steady, Ms. Mester said "we have adopted a wait-and-see approach regarding future rate adjustments. "
"I fully supported this decision because I believe that policy, for the time being, is well-calibrated to the economic outlook and the risks around that outlook," Ms. Mester said in the text of a speech to be delivered in Cleveland. "With respect to our monetary policy goals of price stability and maximum employment, the economy is in a very good spot, she said.
Last week, the Fed maintained its current short-term rate target that stands between 2.25% and 2.50%. Officials said they need time to see if uncertainties around the outlook resolve themselves, in a climate where inflation pressures aren't forcing them to act.
"Growth is slowing from an above-trend pace, and labor markets are strong," she said, adding "inflation is near 2% and does not show signs of appreciably rising."
In this environment, she said, "monetary policy does not appear to be far behind or far ahead of the curve." While Ms. Mester didn't indicate what was next for the Fed, she said, "If the economy performs along the lines that I've outlined as most likely, the fed-funds rate may need to move a bit higher than current levels."