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Fed’s Mester expects inflation above 2% next year and the year after

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Comments from the Cleveland Fed President:

  • She sees inflation risks to the upside
  • If you see long run inflation expectations move up that is a sign monetary policy is too accommodative but right now we don’t see that
  • Expects inflation will start to come down as supply side issues fade
  • Repeats that she expects taper to begin in November

This isn’t surprising from Mester but I’m watching for hawks to shift even more hawkishly.

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