Fed's Mester: Very low interest rates can lead to excessive valuations

Eren Sengezer FXStreet

Although she didn't comment on the monetary policy outlook or the state of the economy, Cleveland Federal Reserve President Loretta Mester noted on Tuesday that very low interest rates can lead to excessive valuations, as reported by Reuters.

"The coronavirus pandemic uncovered vulnerabilities in the nonbank financial sector," Mester further noted.

Market reaction

These comments don't seem to be having a noticeable impact on the USD's performance against its major rivals. As of writing, the US Dollar Index was up 0.15% on a daily basis at 92.00.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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