Fed's Mester: We’re Basically at Full Employment, 2017 Rate Hikes on Track
Cleveland Fed President Loretta Mester called the December jobs report â€œdecentâ€ and â€œin line with what weâ€™ve been seeing.â€
Mesterâ€™s comments came as the stock market dipped following the unspectacular report. But Mester tried to paint a rosy picture.
â€œMy own view is that weâ€™re basically at full employment from the point of view of the monetary policy goal, one of our dual mandate goals,â€ Mester told FOX Business Networkâ€™s Peter Barnes.
When asked if her forecast for interest rate hikes was in line with the Fed forecast of three rate hikes in 2017, Mester said that, although her view differed a bit from the consensus, she was comfortable with the compromise.
â€œIâ€™ve been a little more, seeing a little more strength in the economy,â€ she said. â€œI have a little more built in inflation pressures in my forecast, so you know, Iâ€™m probably a little steeper than that in my forecasts but I think the three, the median path is a good summary of where the tenor of the committee is.â€
Mester said that the Fed remained flexible as it begins to see which policies of President-elect Trump are implemented once he takes office.
â€œI wouldnâ€™t be surprised if our forecast will be more variable this year just because weâ€™re going to incorporate, as more information comes out about what those fiscal packages will look like in terms of tax policy and other policies that the new administration is promulgating.â€
Mester then weighed in on the Fedâ€™s inflation target, explaining, â€œI think that over the next two years weâ€™re going to meet our inflation goal of 2%,â€ Mester continued, â€œAnd as you know, monetary policy has to be forward looking, so you know, what weâ€™re trying to do is sustain the expansion right.â€