Fed's Mester says monetary policy will remain accommodative for 'quite some time'
|Cleveland Fed President Loretta Mester said on Monday that the US economic growth could surge later this year if most Americans are vaccinated against the coronavirus, but the gains would unlikely be enough for the Federal Reserve to pull back its support.
Key comments
''Monetary policy will need to remain highly accommodative for quite some time.''
''Economy’s dynamics suggest inflation not going to move up quickly above 2%.''
''Expect strong pickup in economic activity in H2 of 2021, assuming most people are vaccinated by Q3.''
''Stronger growth this year would not require change in policy.''
''Expects economy will still be far from fed's employment and inflation goals.''
Fed officials agreed at their December meeting to keep interest rates near zero and to continue purchasing about $120 billion a month in government bonds.
Mester added that the Fed would adjust policy if the economy improves more rapidly than expected.
Market implications
There was no reaction to the comments as the Fed is already baked into the markets wich are expecting a lower for longer Fed.
Instead, the US dollar shot higher on Monday pertaining to the threat of the coronavirus variants spreading.
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