Interest rate comment from cautious Fed official

While Loretta Mester, one of the Fed’s officials who ranks in the middle of the hawk-dove scale, previously indicated that the three rate cuts she had previously projected for this year might be too much in the final analysis, San Francisco Fed President Daly said there was no urgency to adjust interest rates. Cleveland Fed President Loretta Mester said monetary policy was restrictive but that officials should wait for more evidence about the path of inflation before cutting interest rates. Mester, who previously favored three rate cuts this year, said she still did not think that would be appropriate given the first-quarter inflation figures. “It’s too early to tell where inflation is going, so we need to get more information on that,” Mester said in an interview on Bloomberg TV. Mester said she continued to expect inflation to fall but that it would not happen quickly, and said that if inflation stopped moving toward the Fed’s 2 percent target, interest rates could be increased, but that this was not the base case. “I’m not sure inflation is sustainably at 2% yet, but I don’t see any evidence that we need to adjust upward right now,” San Francisco Fed President Mary Daly told Axios in an interview.