Mester sees ‘couple’ weak inflation reports ahead

The economy is strong enough for gradual rate hikes to continue, despite the fact there may be a few more weak inflation reports coming, Federal Reserve Bank of Cleveland President Loretta Mester said Friday, according to published reports.

The Fed’s actions “are meant to keep the economy healthy, not to slow down the expansion,” she said, noting underlying economic fundamentals remain “pretty good” and demand is still “solid.”

Mester told reporters she supports beginning balance sheet normalization this year, according to reports, and could support a rate hike and balance sheet cut announcement at the same meeting.

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Loretta Mester, president and chief executive officer of the Federal Reserve Bank of Cleveland, speaks during a New York Association For Business Economics luncheon in New York, U.S., on Friday, April 1, 2016. "The remarkable thing about the economy is how resilient it's been in the face of financial volatility we saw at the end of last year, the beginning of this year, the global weakness," says Mester. Photographer: Michael Nagle/Bloomberg *** Local Caption *** Loretta Mester

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