Fed's Mester: Bank will take into account financial stability when setting monetary policy
|The high-frequency data in the US show that the economic activity slowed down while coronavirus cases were increasing, Cleveland Federal Reserve President Loretta Mester told CNBC on Friday.
Additional takeaways
"Businesses have tempered hiring, the virus is really driving things."
"The Fed's goal is still 2% inflation but the new monetary strategy will allow higher inflation after period where inflation has been low."
"There is no mathematical formula, the strategy is about stabilizing inflation expectations."
"The Fed will take into account financial stability when setting monetary policy."
"Stock markets are rising based on where investors think the economy is headed."
"I understand concern that liquidity from fed is fueling stock market gains but I don't feel the Fed is contributing to an asset bubble."
Market reaction
The greenback continues to weaken against its rivals after these comments. As of writing, the US Dollar Index was down 0.78% on a daily basis at 92.26.
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