Fed’s Mester: We probably still have more work to do

• We have to be very diligent about this
• We don’t want to be satisfied because inflation remains too high
• We’ve had stronger underlying momentum since June forecasts
• We’ve made progress on inflation
• Core inflation over 4% is still too high
• Notes she doesn’t have cuts built in for next year but will watch the data
• It was ‘very good’ to see the recent numbers on inflation, but need to see more
• It’s very likely that we will need below-trend growth to get inflation under control
• Labor market is stronger than I would have anticipated given rates but pandemic effects are working their way through

Mester indicated that not much had changed since she forecast an additional this year. At the same time, she didn’t sound overly committed to do it. She highlighted that the Fed needs to be diligent and watch the data.