Cleveland Federal Reserve Bank President Loretta Mester doesn’t think there will be a recession in the United States but does think it will take two years for inflation to get back to 2%. During an interview on Sunday, Mester explained that while it will take two years, inflation “will move down”.

It will take two years to reach 2% inflation, says Loretta Mester, chair of the Cleveland Fed

Federal Reserve Bank of Cleveland President and CEO Loretta Mester spoke about America’s problems with inflation and a slowing economy in an interview with CNBC on Sunday. Mester says growth is “slowing down to slightly below trend growth,” but she doesn’t think the United States will fall into recession. “There will not be 2% inflation immediately. It’s going to take a few years, but it’s going to move down,” Mester said during her interview.

Mester explained that the Federal Reserve will look for evidence that central bank policies are taming inflation. “We’re going to look at the month-to-month changes in inflation rates to get really good evidence of whether inflation first stabilized and then moved back down,” Mester said. “It will take a while for inflation to get back to 2%. But what we’re looking for is that we can see some moderation in demand, which has been incredibly strong.”

The President of the Federal Reserve Bank of Cleveland added:

Bringing them back into line with the supply side, which of course you know has been constrained, alleviating some of that price pressure, bringing inflation back down and on a sustainable path back to 2%, which is our inflation target .

While Mester ‘isn’t predicting a recession’, she believes ‘recession risks are rising’

When asked if the U.S. would go into recession, Mester said she forecast “no recession.” The Cleveland Fed President said growth is slowing, the unemployment rate is rising “a little bit” and the Fed sees American “households really deferring some of their spending.” The rate hikes implemented by the Fed have already had an impact on the housing market, Mester noted. However, Mester said the Fed needs to be cautious about scaling back central bank policy.

Master emphasized:

We have to be very careful and nimble in how we approach this rollback of this very accommodative monetary policy. That’s more appropriate for the economy.

Of course, Mester’s comment was criticized on social media and by some people compared their statements until the 14th Federal Reserve Chairman Ben Bernanke said he didn’t see a recession coming in February 2008, and then the 2008-2010 recession he said kicked in. While Mester isn’t predicting an imminent recession, she says “recession risks are rising.” The Cleveland Fed President explained that in addition to the Fed’s monetary policy and rate hikes, “there are many other things going on.”

“The situation in Ukraine, which is a tragedy, has really, you know, led to oil prices so high that everyone feels the brunt of it, and high gasoline prices,” Mester stressed. Still, the Fed member believes the Federal Reserve has what it takes to tame the economy and bring inflation back down to 2%. “We at the Fed are very committed to using the tools at our disposal to get this inflation under control and get it back to 2%. It is now the biggest challenge in the economy,” concluded Mester.

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What do you think of Cleveland Fed Chair Loretta Mester’s views on the US economy? Do you think Mester is right or do you expect a US recession? Let us know what you think in the comment section below.

Jamie Redman

Jamie Redman is the news director at News and a Florida-based financial technology journalist. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for News about today’s emerging disruptive protocols.

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