Tag Archives: Mester

Business

Fed’s Mester says there’s been no progress on inflation, so interest rates need to move higher

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With little or no progress made on bringing inflation down, the Federal Reserve needs to continue raising interest rates, Cleveland Fed President Loretta Mester said Tuesday.

“At some point, you know, as inflation comes down, them my risk calculation will shift as well and we will want to either slow the rate increases, hold for some time and assess the cumulative impact on what we’ve done,” Mester told reporters after a speech to the Economic Club of New York.

“But at this point, my concerns lie more on – we haven’t seen progress on inflation , we have seen some moderation- but to my mind it means we still have to go a little bit further,” Mester said.

In her speech, the Cleveland Fed president said the central bank needed to be wary of wishful thinking about inflation that would lead the central bank to pause or reverse course prematurely.

“Given current economic conditions and the outlook, in my view, at the point the larger risks come from tightening too little and allowing very high inflation to persist and become embedded in the economy,” Mester said.

She said she thinks inflation will be more persistent than some of her colleagues.

As a result, her preferred path for the Fed’s benchmark rate is slightly higher than the median forecast of the Fed’s “dot-plot,” which points to rates getting to a range of 4.5%-4.75% by next year.

Mester, who is a voting member of the Fed’s interest-rate committee this year, repeated she doesn’t expect any cuts in the Fed’s benchmark rate next year. She stressed that this forecast is based  on her current reading of the economy and she will adjust her views based on the economic and financial information for the outlook and the risks around the outlook.

Opinion: Fed is missing signals from leading inflation indicators

Mester said she doesn’t rely solely on government data on inflation because some of it was backward looking. She said supplements her research with talks with business contacts about their price-setting plans and uses some economic models.

The Fed is also helped by some real-time data, she added.

“I don’t see the signs I’d like to see on the inflation,” she added,

Mester said she didn’t see any “big, pending risks” in terms of financial stability concerns.

“There is no evidence that there is disorderly market functioning going on at present,” she said.

U.S. stocks were mixed on Tuesday afternoon with the Dow Jones Industrial Average
DJIA,
+0.12%
up a bit but the S&P 500 in negative territory. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.936%
inched up to 3.9%

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Entertainment

Anchor Mark Mester Fired from KTLA – The Hollywood Reporter

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KTLA fired anchor Mark Mester days after he was suspended for going off-script and calling out how the station handled the resignation of his long-time co-anchor Lynette Romero, The Hollywood Reporter has learned.

Station general manager Janene Drafs announced that Mester had been fired during a newsroom meeting on Thursday, the Los Angeles Times reported.

On Sept. 14, KTLA announced that Romero had decided to move on after nearly 24 years at the station and pursue another opportunity, despite the station hoping she would spend the rest of her career with them.

“KTLA worked hard to make that happen,” anchor Sam Rubin said during a broadcast. “Lynette, we wish you luck, we miss you and we thank you for everything you’ve done for KTLA. … On behalf of everyone here, we wish you and your family nothing but the best.”

Following Romero’s exit, Mester spent a portion of his show on Sept. 17 going off-script to apologize on behalf of the station to the viewers, saying that the way it handled the resignation “was rude, it was cruel, it was inappropriate, and we are so sorry.”

“You did not deserve this,” Mester said, calling Romero his “best friend.’ “It was a mistake, and we hope you can find it in your heart to forgive us.”

KTLA did not respond to THR‘s request for comment on Mester’s exit but did share a statement about Romero leaving the show.

“After 24 years, Lynette Romero has decided to move on from anchoring our weekend morning news,” station news director Pete Saiers said. “We really wanted her to stay and KTLA Management worked hard to make that happen. Lynette decided to leave for another opportunity. We had hoped she would record a farewell message to viewers but she declined. Lynette has been a wonderful member of the KTLA family and wish her and her family the best.”



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Entertainment

L.A. News Anchor Mark Mester Fired After Calling Out KTLA – Deadline

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Mark Master has been fired from L.A. television station KTLA days after being suspended for openly calling out his bosses for the way they treated co-host Lynette Romero’s departure.

According to the Los Angeles Times, KTLA general manager Janene Drafs announced during a meeting in the newsroom that Mester had been fired. The local news anchor’s page on KTLA now forwards to a page of the news team where Mester is no longer listed either.

Last week, Sam Rubin went on-air to read a statement from KTLA announcing that long-time news anchor Lynette Romero had left the station.

“After nearly 24 years, Lynette Romero, our friend Lynette, has decided to move on from anchoring our weekend morning news,” Rubin read. “KTLA management had hoped she would stay here her entire career and KTLA worked hard to make that happen, but Lynette has decided to move onto another opportunity elsewhere.”

Romero was not able to say goodbye to the viewers and there was no farewell video package in her honor, which drew the ire of many loyalists.

Mester, who had co-anchored with Romero the newscast, went on the air to give her friend the proper sendoff and wish her the best in her new job opportunity and called out KTLA for the way the announcement was handled.

“What the viewers experienced was rude, it was cruel, it was inappropriate, and we are so sorry,” Mester said. “I also want to say sorry to Lynette Romero because, Lynette, I love you so much. You really are my best friend. You did not deserve what happened to you on Wednesday.”

Mester would be later suspended from his job duties with KTLA later making the decision to cut ties with him.



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Business

Fed’s Mester backs 75 basis point hike in July if conditions remain the same

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Cleveland Fed President Loretta Mester takes part in a panel convened to speak about the health of the U.S. economy in New York November 18, 2015.

Lucas Jackson | Reuters

Federal Reserve Bank of Cleveland President Loretta Mester said Wednesday that if economic conditions remain the same when the U.S. central bank meets to decide its next monetary policy move in July, she will be advocating for a 75 basis point hike to interest rates.

The Fed’s path of monetary tightening has become a key driver of market activity in recent months as the central bank looks to act aggressively to rein in soaring inflation, while acknowledging the risk that steeper interest rate rises will increase the likelihood of an economic recession.

The Fed opted for a 75 basis point hike to its benchmark rate earlier this month, the biggest increase since 1994, with inflation running at a 40-year high.

Mester — a voting member of the Federal Open Market Committee — said July’s meeting will likely involve a debate among FOMC policymakers over whether to opt for 50 basis points or 75 basis points.

“If conditions were exactly the way they were today going into that meeting — if the meeting were today — I would be advocating for 75 because I haven’t seen the kind of numbers on the inflation side that I need to see in order to think that we can go back to a 50 increase,” she told CNBC’s Annette Weisbach.

Mester said she will be making an assessment of supply and demand conditions over the coming weeks prior to the meeting in order to determine the preferred path of monetary policy tightening.

The “dot plot” of individual FOMC members expectations places the Fed’s benchmark rate at 3.4% by the end of the year, from its current target range of 1.5%-1.75%.

“I think getting interest rates up to that 3-3.5%, it’s really important that we do that, and do it expeditiously and do it consistently as we go forward, so it’s after that point where I think there is more uncertainty about how far we’ll need to go in order to rein in inflation,” Mester said.

‘Painful transition’

U.S. markets tumbled on Tuesday after a disappointing consumer confidence reading, which came in at 98.7 against a Dow Jones consensus estimate of 100, furthering investors’ jitters about slowing economic growth and the potential compounding effect of aggressive monetary policy tightening.

Mester suggested that consumers’ experience of inflation, which hit 8.6% at the headline level in May, was “clouding” their confidence in the economy.

“At the Fed, we’re on a path now to bring our interest rates up to a more normal level and then probably a little bit higher into restrictive territory, so that we can get those inflation rates down so that we can sustain a good economy going forward,” she said.

“Job one for us now is to get inflation rates under control, and I think right now that’s coloring how consumers are feeling about the economy and where it’s going.”

Mester acknowledged there is a risk of recession as the Fed embarks on its tightening policy. However, her baseline forecast is for growth to be slower this year, below “trend growth,” which she puts at 2%, as the Fed tries to moderate demand and bring it closer to constrained supply.

“I expect to see unemployment rates rise over the next two years to a little above 4% or 4.25%, and again that’s still very good labor market conditions,” she said.

“So we’re in this transition right now, and I think that’s going to be a painful one in some respects and it’s going to be a bumpy ride in some respects, but it’s very necessary that we do it to get those inflation numbers down.”

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Business

Fed’s Mester says returning inflation to 2% will take ‘a couple of years’

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Recession risks are growing and it would take ‘a couple of years’ for inflation to return to the US Federal Reserve’s target of 2 per cent, Loretta Mester, president of the Cleveland Fed, said on Sunday.

“I’m not predicting a recession,” she said. “The recession risks are going up, partly because monetary policy could have pivoted a little earlier than it did. We’re doing that now by moving interest rates up but, of course, there’s a lot of other things going on as well,” Mester said on CBS’s “Face the Nation”.

“We do have growth slowing . . . and that’s OK, we want to see some slowing of demand to get in better line with supply.”

Mester said that while monetary policy can target the excessive demand in the economy, it will take time to get the supply side “to come back into better balance”.

“It isn’t going to be immediate that we see 2 per cent inflation, it will take a couple of years, but it will be moving down,” she said.

US Treasury secretary Janet Yellen conceded on Sunday that the economy would slow, but said a recession was not “inevitable”.

“I expect the economy to slow, it’s been growing at a very rapid rate as the labour market has recovered and we’ve reached full employment,” Yellen said on ABC’s This Week. “We expect a transition to steady and stable growth but I don’t think a recession is at all inevitable.”

The Fed this week raised its main interest rate by 0.75 percentage points, the first time it has done so since 1994.

It also set the stage for much tighter monetary policy in the near term, with officials projecting rates to rise to 3.8 per cent in 2023 and most of those increases scheduled for this year. They now hover between 1.50 per cent and 1.75 per cent.

On Saturday, Fed governor Christopher Waller said he would support another 0.75 percentage point interest rate rise at the central bank’s next meeting in July if, as expected, data showed that inflation had not moderated enough.

Fed chair Jay Powell has said his goal is to bring inflation down while maintaining a strong labour market.

“That’s going to take skill and luck, but I believe it’s possible,” Yellen said.

Yellen said that while there was month-to-month volatility in consumer spending, overall it remained strong and she did not expect a drop off in spending would cause a recession.

“It’s clear that most consumers, even lower-income households, continue to have buffer stocks of savings that will enable them to maintain spending,” the Treasury secretary said. “I don’t see a drop off in consumer spending is a likely cause of the recession in the months ahead.”

The labour market also remained strong, she said, with two job openings for every unemployed worker.

Yellen reiterated the Biden administration’s argument that Russia’s war on Ukraine was partly to blame for high inflation because it boosts global food and energy prices. Supply chain snarls from lockdowns in China are also contributing, she said. Though these factors will not change immediately she said she expected inflation to go down.

“I do expect in the months ahead that the pace of inflation is likely to come down, although, remember there are so many uncertainties relating to global developments,” she said.

Other senior officials on Sunday repeated the line that recession was not inevitable, even as surveys show economists and business leaders expect one next year.

“Where we are in the economy right now is a transition and I’ve spoken to CEOs over the past week from sectors across the economy and they’re figuring out how to navigate the transition,” said Brian Deese, director of the US National Economic Council.

Deese said Biden was working with Congress on legislation to lower costs for things such as prescription drugs and utilities. “The single most impactful thing we can do right now is to work with Congress to pass legislation that would lower the costs of things that families are facing right now,” he said.

The White House also wants the package to include tax reforms that would lower the deficit and is working with senior Senate Democrat Chuck Schumer to put measures in place in the coming weeks, Deese said.

Biden is also looking to reduce petrol prices, and senior administration officials said on Sunday that the US was weighing a temporary pause on the federal gas tax. Yellen said it was “an idea certainly worth considering” and that Biden was looking to work with Congress to try to bring gas prices down.

Energy secretary Jennifer Granholm said on CNN that the Biden administration was evaluating a proposal for a gas tax holiday.

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Business

Fed’s Mester says inflation hasn’t peaked and multiple half-point rate hikes are needed

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Cleveland Federal Reserve President Loretta Mester said Friday that she doesn’t see ample evidence that inflation has peaked and thus is on board with a series of aggressive interest rate increases ahead.

“I think the Fed has shown that we’re in the process of recalibrating our policy to get inflation back down to our 2% goal. That’s the job before us,” Mester said in a live interview on CNBC’s “The Exchange.”

“I don’t want to declare victory on inflation before I see really compelling evidence that our actions are beginning to do the work in bringing down demand in better balance with aggregate supply,” she added.

Mester spoke the same day the Bureau of Labor Statistics reported that nonfarm payrolls rose by 390,000 in May, and, importantly, that average hourly earnings had increased 0.3% from a month ago, a bit lower than the Dow Jones estimate.

While other recent data points have shown that at least the rate of inflation increases has diminished, Mester said she will need to see multiple months in that trend before she’ll feel comfortable.

“It’s too soon to say that that’s going to change our outlook or my outlook on policy,” she said. “The No. 1 problem in the economy remains very, very high inflation, well above acceptable levels, and that’s got to be our focus going forward.”

Recent statements from the rate-setting Federal Open Market Committee indicate that 50 basis point — or half-point — rate increases are likely at the June and July meetings. Officials are likely then to evaluate the progress that the policy tightening and other factors have had on the inflation picture.

But Mester said any type of pause in rate hikes is unlikely, though the magnitude of the increases could be reduced.

“I’m going to come into the September meeting, if I don’t see compelling evidence [that inflation is cooling], I could easily be at 50 basis points in that meeting as well,” she said. “There’s no reason we have to make the decision today. But my starting point will be do we need to do another 50 or not, have I seen compelling evidence that inflation is on the downward trajectory. Then maybe we can go 25. I’m not in that camp that we thinks we stop in September.”

Mester’s comments were similar to statements Thursday from Fed Vice Chair Lael Brainard, who told CNBC that “it’s very hard to see the case” for pausing rate hikes in September. She also stressed that quashing inflation, with is running near 40-year highs, is the Fed’s top priority.

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