Cleveland Fed President Loretta Mester said on Tuesday that she expects the US economy to be weak in the first few months of 2021, as reported by Reuters.
Additional takeaways
“If vaccinations roll out, a strong pickup in growth is expected in the second half of 2021.”
“Not expecting to see substantial further progress toward the Fed’s goals this year.”
“We need more accommodation than we have in the past to lift inflation to the Fed’s 2% target.”
“Would probably not be upset if inflation reaches 2.5% because it likely would not move quickly.”
“The real issue now is inflation that can get too low.”
“Low yields can create financial stability risks but risks underlying the financial system right now are not excessive.”
“Monetary policy is well-calibrated.”
“Would like the Fed to begin to taper asset purchases next year but it really depends on the economy.”
“If vaccine rollout is much slower than expected that would slow economic growth and lower outlook.”
“The Fed has tools to deal with instability in financial markets.”
Market reaction
The US Dollar Index largely ignored those comments and was last seen losing 0.13% on the day at 89.75.