Following the comments from Chicago Federal Reserve Bank President Charles Evans, Cleveland Fed President Loretta Mester also crossed wires, vira Reuters, during the early Asian session on Thursday. The Fed member initially said, “We are in a good spot with monetary policy right now.” Her following remarks, however, copied the recent fashion among Fed policymakers to favor the need for more stimulus while mentioning “We probably need more fiscal aid to get us through this.”
Additionally, the need to address structural issues in the Treasury market and strong vaccinations in the third quarter (Q3) could also be spotted in the Cleveland Fed President’s latest comments. Furthermore, her extra emphasis on the Fed’s status-quo can be seen in comments like, “I am not worried the Fed will be late to tighten monetary policy if inflation picks up.”
Market reaction…
Given the lack of strong signals and repeated commentary, Fed’s Mester joined the line of Chicago Fed President Evans and couldn’t move the markets. However, the previous cautious optimism showed by the US 10-year Treasury yeilds and Wall Street performance, mainly due to the stimulus and vaccine news, keeps the bulls hopeful.
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