Cleveland Federal Reserve President Loretta Mester crossed the wires, via Reuters, while speaking on “The outlook for the economy and Federal Reserve policy” to an economic forum.
Key quotes
Second-quarter GDP could show largest quarterly decline on record.
Inflation to decline further this year.
Labor market deterioration worse than numbers indicate because many people left labor force or had hours cut.
Q2 will show most severe effects of pandemic shutdown on economic activity.
Economic outcomes could be more dire if virus is not controlled and health-care system gets overwhelmed.
Expects economic activity to pick up in the second half of 2020.
More fiscal support needed, to support states, municipalities and households.
Fed is continuing to look for gaps where it can use tools to support the economy.
Interest rates need to remain low for a lot longer.
Negative rates not a tool we would want to use in the US.
FX implications
Considering the early hours of the Asian session on Thursday, the news failed to provide any major market mood as traders are more interested in the coronavirus (COVID-19) updates recently. Though, the market’s risk-tone remains compressed with the mention of uncertainty in the speech.
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