SYDNEY-Loretta Mester, president of the Federal Reserve Bank of Cleveland, said Tuesday that she remains upbeat over the U.S.jobs market, adding that a gradual “upward tilt” in interest rates remains appropriate.
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Bullard, a voting member of the US central bank’s rate-setting committee, recently shifted his view of monetary policy, concluding that the United States had entered a persistent period of low growth, low inflation, and low unemployment. Louis Fed President James Bullard on Tuesday stuck with his view that only a single interest rate increase will be needed for the foreseeable future, despite the strong rebound in USA job growth in June.
“Now that the markets have had some chance to digest the move, I think the ultimate impact on the US economy will be close to zero”, Bullard told reporters Tuesday following a speech in St. Louis.
“I would expect continued slowing in the pace of job growth”, he said.
Half of the Federal Reserve banks wanted a 0.25 percent hike in the discount rate in June.
Recent inflation data has also been encouraging and consistent with the Fed’s expectation that on-year inflation will gradually move back up to 2%, she said.
He said the U.S.is likely to achieve faster economic expansion only if other parts of the government respond with policies that address very low levels of productivity growth and demographic trends.
“I can’t tell you any particular time frame, when we are going to be assessing those things to happen”, she said. Fed officials have repeatedly raised the point, he added.
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Mester is a voting member on Fed policy this year and has often warned that waiting too long to raise rates could create risks to financial stability.
