Fed’s Mester: Cutting rates now could reinforce negative sentiment, encourage financial imbalances

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In her prepared remarks to be delivered in London, Cleveland Federal Reserve Bank President Loretta Mester on Tuesday argued that cutting rates now could reinforce negative sentiment and encourage financial imbalances and added that she’d like to gather more information before considering a change in the monetary policy.

The US Dollar Index didn’t react to these hawkish remarks and was last seen virtually unchanged on the day near 96.80. Below are some additional comments, per Reuters.

“It is too soon to determine whether economy is moving to weak-growth scenario.”

“Some argue Fed should lower rates to push up inflation expectations, but it is not clear how effective this would be.”

“Weak job reports, declines in manufacturing, weaker business spending, declines in inflation could eventually create case for rate cut.”

“Brexit, trade policy, middle east tensions are among sources of uncertainty.”

“Good U.S. economic performance in 2019 is most likely, but downside risks have increased.”

“Monetary policy should not create imbalances to address uneven effects of U.S. growth.”

“Question is whether growth will slow to sustainable trend, as she expects, or to weak growth.”

“U.S. consumer spending trends positive, housing neutral, business investment negative.”

“Bond investors putting higher likelihood on weak-growth scenario in united states.”

“Agrees with Fed’s assessment of economic outlook at most recent meeting.”

“Slower 2nd quarter growth could still be a solid showing for the first half of the year.”

“Labour market is healthy, financial conditions accommodative.”

“Policymakers need more data on whether slowdown in business spending will be sustained.”

“Subdued global growth, stronger dollar weighing on U.S. exports, manufacturing.”

“Direct effects of U.S. tariffs already imposed ‘relatively modest.”

“Concern over tariffs is growing among Fed business contacts.”

“Job growth should slow to trend; unemployment rate below sustainable levels.”

“Wage growth has not added to inflation pressures.”

“Inflation pressures muted; recent declines bear watching.”

 

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