Did Loretta Mester Just Become The Most Important Fed Official?

Did Loretta Mester Just Become The Most Important Fed Official?

"It should go without saying that a CPI upside surprise would extend the current status quo of 'short' both bonds and equities, and keep feeding into volatility," Nomura's Charlie McElligott said Wednesday, a few minutes prior to the release of consumer price data for April. Unfortunately for the Fed (and, more importantly, for Americans struggling to pay for basic necessities), April's CPI report did indeed surprise to the upside. Both the headline and core gauges topped estimates on an annua
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2 thoughts on “Did Loretta Mester Just Become The Most Important Fed Official?

  1. How does one arrive a a neutral rate estimate equal to 2018’s high water mark?

    (Not saying ffr shouldn’t or won’t go to 2.5 as overshooting neutral seems like a necessity)

  2. Mester’s outlook is reasonable but it looks like we are reaching an inflection point. When things change they change fast after hitting that point. But my musings don’t really matter. What matters is what happens in the next 3-6 months. You can pretty much pencil in 2 more 50s barring something out of left field. Keep an eye on DXY- the dollar index and the shape of the yield curve are suggesting the Fed may not be so far behind. Again we shall see.

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