Fed’s hawkish chairwoman Mester: “Inflation needs to improve further before we can cut rates”

(New York = Edaily correspondent Kim Sang-yoon) Cleveland Federal Reserve Bank President Loretta Mester, who is considered a hawk within the Federal Reserve (in favor of monetary tightening), said that inflation data must improve further before interest rates can be cut.

Loretta Mester, President of the Federal Reserve Bank of Cleveland. (Photo = AFP)

On the 14th local time, President Mester said in an interview with CNBC, “The lower inflation indicators in May are good news, but the central bank should see whether this situation will last longer before cutting interest rates.” Interest rates have slowed down and short-term inflation expectations are low, “it should start to fall,” he said.

The explanation is that since the slowdown in inflation stagnated in the first half of the year, interest rates can only be lowered after confirming whether the deflationary trend will continue in the future.

Meanwhile, Governor Mester, who has voted on the Federal Open Market Committee this year, is set to retire at the end of this month when her term ends. Beth Hammack (52), co-head of the global financing group at investment bank Goldman Sachs, is expected to take over as the next president.