Cleveland Federal Reserve President Loretta Mester highlighted the importance of reducing incessant inquiries about the central bank's upcoming decisions on Friday. While speaking at the Shadow Open Market Committee in New York, Mester suggested that limiting speculation about federal funds rate hikes at every meeting could offer beneficial stability to firms and markets adjusting to forthcoming hikes.
Mester supports an additional rate hike this year, which would position the federal funds rate at 5.5%-5.75%. Despite the potential for an extra increase, she indicated that the central bank is nearing the end of its rate-hiking cycle.
The Fed official, set to be a voting member of the Fed's interest-rate committee in 2024, confirmed that significant progress has been made by the Fed in curbing inflation. She also forecasted an economic slowdown and a cooling labor market. Mester acknowledged Charles Evans' role in setting specific benchmarks for rate increases in 2012.
On Friday, stocks DJIA SPX declined while the yield on the 10-year Treasury note BX:TMUBMUSD10Y fell below 5%. Bankers in Mester's district have reported an increased utilization of home equity lines of credit and credit cards for spending. As savings balances normalize and credit conditions remain restrictive, consumer spending is expected to moderate.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.