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Cleveland  Fed  President Loretta Mester crossed wires, via Reuters, during late Thursday in the US while saying, “US economy will grow by 6% or more this year and the unemployment rate will drop to 4.5% or lower by year-end.”

The Fed policymaker also said that the economy has a long way to go until sustainable recovery while also suggesting that prices are going to stabilize or come down as supply chain disruptions are solved.

Additional comments…

  • US economy will grow by 6% or more this year and unemployment rate will drop to 4.5% or lower by year-end.
  • Sizable support from fiscal and monetary policy and vaccination deployment point to a pickup in activity in the second half of this year.
  • Labor market conditions will improve if there is not a surge in virus variants resistant to vaccines
  • Vaccinations, school reopenings and child-care will be important to getting people back to work
  • The uptick in inflation expectations is due to better economic outlook.
  • Not concerned about inflation getting too high.
  • Modest increase in inflation expectations is not worrisome.

FX implications

As these comments are more or less similar to what the Federal Reserve policymakers have been saying, market players paid a little heed to the news as Asian traders prepare for a busy Friday loaded with China data.

Read:  AUD/USD: Firm around a month’s high towards 0.7800, focus on China data dump

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