Reducing inflation remains the Fed’s main objective: Mester

Federal Reserve Bank of Cleveland President Loretta Mester reiterated on Tuesday that reducing inflation remains critical for the U.S. central bank.

“Given the high levels of inflation, restoring price stability remains (the Federal Open Market Committee’s) number one goal and we are committed to using our tools” to return inflation to the 2% target, Mester said in his keynote address at a virtual event.

He did NOT comment on the outlook for monetary policy.

Mester said wage increases are clearly on the rise, though he added that in most cases they remain below inflation, suggesting workers’ compensation is not a key driver of inflation.

He also stated that inflation expectations readings remain stable.

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