Mester says March is 'probably' too soon for a rate cut

Mester says March is ‘probably’ too soon for a rate cut

Inflation’s Shaky Path Toward the Federal Reserve’s 2% Targetreflected in the latest figures of the Consumer Price Index (CPI), means it is likely too early to cut the policy rate in Marchsaid the president of the entity in Cleveland on Thursday.

“I think March It’s probably too early for a rate cut, because I think we need to see more evidence“said Loretta Mester in an interview with Bloomberg TV.

“I think the December CPI report It just shows that there is more work to be done and that work is going to require restrictive monetary policy.“he added.

The central bank of the United States In December, it predicted cuts to its benchmark interest rate for overnight loans this year.but the timing and pace of these continue to change as monetary authorities analyze economic data.

Mester cited the need for the goods, housing and lodging categories excluding housing in measuring inflation to “see more progress”as well as salary increases slowing down.

Earlier on Thursday, The difficulty in reducing inflation was underlined by a stronger-than-expected reading on price pressuresas Americans paid more for rent and healthcare.

However, Investors continue to bet that the Fed will begin cutting its official interest rate in Marchaccording to an analysis of federal funds futures contracts by the CME Group.

The inflation data was released after the monthly employment report released last Friday, which showed a still resilient labor market, with employers adding 216,000 jobs in December and annual wage growth rising slightly.

The panel that sets the Fed’s monetary policy will meet on January 30-31, when the central bank is expected to keep its benchmark rate unchanged at the current range of 5.25%-5.50%.