Loretta Mester, President of the Cleveland Federal Reserve Bank, stated that it will take two years for inflation to fall to the central bank's target of 2 per cent, adding that it will "move down" gradually from its current level.
A jump in inflation, which is at its highest level in 40 years, has turned virtually all Fed policymakers into hawks, with only one dissenting earlier this week against the central bank's largest rate increase in more than a quarter-century.
"It isn't going to be immediate that we see 2 per cent inflation. It will take a couple of years, but it will be moving down," Mester said in an interview with CBS News on Sunday.
Despite decreasing growth, Mester said she does not expect a recession.
"We do have growth slowing to a little bit below trend growth and we do have the unemployment rate moving up a little bit. And that is OK, we want to see some slowing in demand to get it in line with supply," Mester added, referring to forecasts submitted in the past week by participants of the Federal Open Market Committee's meeting.
Policymakers presently expect the Fed's benchmark overnight interest rate to rise to at least 3.4 per cent in the next six months, from its current range of 1.50 per cent -1.75 per cent. A year ago, the majority of economists predicted that the rate would have to remain near zero until 2023.
The Fed declared its fight against inflation "unconditional" on Friday.
(Source:www.business-standard.com)
A jump in inflation, which is at its highest level in 40 years, has turned virtually all Fed policymakers into hawks, with only one dissenting earlier this week against the central bank's largest rate increase in more than a quarter-century.
"It isn't going to be immediate that we see 2 per cent inflation. It will take a couple of years, but it will be moving down," Mester said in an interview with CBS News on Sunday.
Despite decreasing growth, Mester said she does not expect a recession.
"We do have growth slowing to a little bit below trend growth and we do have the unemployment rate moving up a little bit. And that is OK, we want to see some slowing in demand to get it in line with supply," Mester added, referring to forecasts submitted in the past week by participants of the Federal Open Market Committee's meeting.
Policymakers presently expect the Fed's benchmark overnight interest rate to rise to at least 3.4 per cent in the next six months, from its current range of 1.50 per cent -1.75 per cent. A year ago, the majority of economists predicted that the rate would have to remain near zero until 2023.
The Fed declared its fight against inflation "unconditional" on Friday.
(Source:www.business-standard.com)
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