Cleveland Fed President Loretta Mester said, “Without sufficient evidence to convince us that inflation is on a sustainable path back to 2% in time, lowering interest rates too early or too quickly would risk All the progress we’ve made on inflation has been lost.
The Fed is still expected to cut interest rates later this year.
Fed policy is in a good position to guide economic risks.
If the economy grows as expected, the Fed could gradually lower interest rates.
Strong economic growth gives the Fed room to take stock before cutting interest rates.
Inflation is expected to ease at a slower pace.
Inflation is not expected to return to 2% smoothly.
Risks to the economic outlook more balanced
The long-term funding rate is 3%, compared with 2.5% previously
Increased growth view, economic activity this year will be slightly above 2%
The labor market is more balanced and the unemployment rate is expected to rise.
