Fed’s Mester backs gradual approach to tightening

Cleveland Fed President and voting member Loretta Mester, while speaking in Florida, said she backs gradual and data dependent path of tightening.

Mester added, “It would be premature to change rate outlook”.

Key Quotes

Labor market is solid/income healthy

Market volatility and cheaper oil poses risks

Longer inflation expectations are relatively stable, inflation likely to return to 2% in medium-term

Headline inflation to stay lower for longer

Must consider implications of China for global growth