Mester says Fed will pare back policy support to curb inflation
BNN Bloomberg
The Federal Reserve will roll back pandemic policy support in a way that will help cool the hottest inflation in decades but still support economic growth and jobs, Bank of Cleveland President Loretta Mester said.
The U.S. Federal Reserve will roll back pandemic policy support in a way that will help cool the hottest inflation in decades but still support economic growth and jobs, Bank of Cleveland President Loretta Mester said.
“Our intent is to reduce accommodation at the pace necessary to bring demand into better balance with constrained supply in order to get inflation under control while sustaining the expansion in economic activity and healthy labor markets,” Mester said in remarks prepared for delivery at an event organized by the University of Akron on Thursday.
Some economists including former Treasury secretary and paid Bloomberg contributor Larry Summers are skeptical that the Fed can chart a path that will see the country out of its inflationary funk without causing a downturn.
Fed officials are reinforcing expectations they’ll raise interest rates by a half percentage point next month, accelerating their efforts to curb inflation. U.S. consumer prices rose 8.5 per cent in March from a year earlier, marking the biggest increase since 1981.
Interest-rate futures are almost fully priced for a half-point hike at the Fed’s May 3-4 meeting, when officials could also announce a start date for beginning to shrink their almost US$9 trillion balance sheet.
