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“The support from fiscal and monetary policy should lead to a  strong 2nd half,”  Cleveland  Fed  President Loretta Mester said on Monday during her CNBV appearance.

The Fed policymaker also praised the recent recovery in jobs report while citing concerns as the employment indicator is still 8.5 million below the pre-pandemic levels.

Though, her comments that “The economic outlook is brightening,” seem to have summed up the cautious optimism.

Additional comments”¦

We need more jobs reports like March jobs reports.

The  question becomes are we a maximum employment and is  inflation above are 2% goal. Still far from  policy goals.

We need to be  very deliberately patient on  monetary policy.

Expect  high inflation readings in the next few months, but they won’t be sustained.  

Are the  higher inflation rates going to be sustained? My guess is no. The price increases from supply constraints are not going to be sustained.  

Higher inflation moderately above 2% is going to be a positive.

Don’t have concerns that inflation is going to run away from us.

Higher prices from supply-side issues could last 6 months or so.

Not concerned with the rise in bond yields.

The Fed will continue to support the economy.

FX implications

The mostly upbeat comments helped add to the market’s risk-on mood and propelled Wall Street benchmarks as the US traders return after an extended weekend.

Also read:  Market pricing of Fed rate hike is too aggressive – Barclays