Cleveland Federal Reserve Bank President Loretta Meester doesn’t think there will be a recession in the United States, but she believes it will take two years to bring inflation back to 2%. Speaking during an interview on Sunday, Meester explained that it would take two years, but that inflation “will be going down.”
Cleveland Fed Chair Loretta Meester Says It Will Take 2 Years To Achieving 2% Inflation
Federal Reserve Bank of Cleveland President and CEO Loretta Meester spoke to CNBC in an interview Sunday to discuss America’s issues with inflation and a slowing economy. Meester says growth is “slightly below trend,” but he doesn’t believe the United States will fall into recession. “It is not going to be immediate that we see 2% inflation. It will take a few years, but it will be going down,” Meester said during his interview.
Meester said the Federal Reserve will look for evidence that central bank policy is controlling inflation. “We’re going to be looking for month-to-month changes in inflation rates to find some good evidence that we’ve stabilized inflation first and then started going back down,” Meester explained. “It is going to take some time to bring inflation back to 2%. But what we are looking for is that we may see some reduction in demand, which has been incredibly strong.”
The chairman of the Federal Reserve Bank of Cleveland said:
Putting it back in alignment with the supply side, which has certainly, as you know, been constrained, easing some of that price pressure, driving inflation back down and into a sustainable path. But back to 2%, which is our inflation target.
While Meester is ‘not predicting a recession,’ he believes ‘recession risks are rising’
When asked whether the US would be headed for a recession, Meester said she was “not predicting a recession.” The Cleveland Fed branch president said growth was slowing, the unemployment rate was rising “a little bit” and the Fed is seeing US “families really shifting some of their spending.” Meester said the rates being implemented by the Fed have already had an impact on the housing market. Meester, however, said the Fed needs to be cautious about rolling back central bank policy.
Meester emphasized:
We have to be very careful and nimble in the way we pull back this very liberal monetary policy. It is somewhat more suitable for the economy.
Of course, Meester’s remarks were criticized on social media and some compare their statements His statements followed when Ben Bernanke, the 14th chairman of the Federal Reserve, said he did not see a recession in February 2008, and then the recession of 2008–2010. While Meester doesn’t predict an impending recession, she says that “recession risks are increasing.” The Cleveland Fed branch president elaborated that in addition to the Fed’s monetary policy and interest rate hikes, “there are a lot of other things going on.”
“The situation in Ukraine, which is a tragedy, really, you know, everyone is bearing the brunt of it because of the high oil prices,” Meester stressed. Still, the Fed member believes the US central bank has what it takes to tame the economy and bring inflation back to 2%. “At the Fed we are very committed to using the tools at our disposal to get this inflation under control and bring it back to 2%. This is the number one challenge in the economy now,” Meester concluded.
What do you think of Cleveland Fed Chair Loretta Meester’s opinion on the US economy? Do you think Meester is right or do you expect a recession in the US? Tell us what you think in the comment section below.
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