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President Mester assesses jobs report and U.S. economy, spells out policy approach in interviews with CNBC and Bloomberg

05.03.19

Cleveland Fed President Loretta J. Mester explained her intention to take a patient approach to inflation in light of strong labor markets and other positive economic conditions in May 3 interviews with CNBC's Steve Liesman and Bloomberg TV's Michael McKee at the Hoover Institution's monetary policy conference in Stanford, California.

View the interviews here:
Watch CNBC's full interview with Cleveland Fed President.
Mester Says Fed Is in a Good Spot, Has Time to Assess.

Headlines

  • Semiconductor Shortages and Vehicle Production and Prices

    Pawel Krolikowski Kristoph Naggert

    Vehicle production has fallen since the beginning of the pandemic recession. We investigate reasons for this decline. Manufacturers in this industry cite insufficient materials, including a lack of semiconductors, as increasingly responsible. Demand seems to be less of an issue. In fact, demand has been strong, and together with accelerating prices and sharply declining inventories, it suggests an insufficient supply of new cars. Our best guess is that the materials shortages and their effects on new car prices will subside within the next six to nine months. Read More

  • Why Has Durable Goods Spending Been So Strong during the COVID-19 Pandemic?

    Kristen Tauber Willem Van Zandweghe

    Consumers increased their purchases of durable goods notably during the COVID-19 pandemic. The pandemic may have lifted the demand for durable goods directly, by shifting consumer preferences away from services toward a variety of durable goods. It may also have stimulated spending on durable goods indirectly, by prompting a strong fiscal policy response that raised disposable income. We estimate the historical relationship between durable goods spending and income and find that income gains in 2020 accounted for about half of the increase in durable goods spending, indicating that the direct and indirect effects of the pandemic on durable goods spending were about equally important. Read More

  • Why Wasn’t there a Nonbank Mortgage Servicer Liquidity Crisis?

    Lara Loewenstein

    In March 2020, in the early days of the COVID-19 pandemic, many were concerned about the liquidity of nonbank mortgage servicers. As it turned out, the vast majority of these servicers did not face a liquidity crisis. In this Commentary I detail the reasons why, including lower than expected take up rates of forbearance, the role played by mortgage origination income, and the actions taken by the government-sponsored enterprises, Ginnie Mae, and housing agencies. Read More

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