Inflation will not fall to the 2% target in two years, Mester told the Fed

Cleveland Fed President Loretta Mester took part in a panel convened to speak on the health of the US economy in New York on November 18, 2015.

Lucas Jackson Reuters

Cleveland Federal Reserve Chairman Loretta Mester said it would take two years for inflation to fall to the central bank’s 2% target, adding that it would “move down” gradually from the current level.

Inflation, at its highest level in 40 years, has led hawks to almost all Fed politicians, only one of whom disagreed earlier this week against the largest increase in central bank interest rates for more from a quarter of a century.

“It will not happen immediately to see inflation of 2%. It will take several years, but it will move down,” Mester said in an interview with CBS News on Sunday.

Mester said he did not predict a recession, despite slowing growth.

“We have a slowdown in growth to just below the trend, and the unemployment rate is rising slightly. And that’s good, we want to see some slowdown in demand to bring it in line with supply,” Mester added, citing forecasts presented. last week by participants in a meeting of the Federal Open Market Committee.

Politicians currently expect to raise the Fed’s reference rate for overnight, now in the range of 1.50% -1.75%, to at least 3.4% over the next six months. A year ago, the majority thought that the percentage would have to stay close to zero until 2023.

On Friday, the Fed announced its fight against inflation “unconditional.”

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