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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

  • A Growth-Augmented Phillips Curve

    Kristen Tauber Willem Van Zandweghe

    Empirical studies find that the link between inflation and economic slack has weakened in recent decades, a development that could hamper monetary policymakers as they aim to achieve their inflation objective. We show that while the role of economic slack has diminished, economic growth has become a significant driver of inflation dynamics, indicating that the link between inflation and economic activity remains but the relevant gauge of activity has changed. The new evidence suggests that the COVID-19-related recession could induce substantial disinflationary pressure. Read More

  • The Information Effect of Monetary Policy: Self-Defeating or Optimal?

    Wesley Janson Chengcheng Jia

    As the Federal Reserve has become more transparent about its decisions on the federal funds target rate, the general public has begun to regard the rate as not only a benchmark interest rate, but also as a signal about the state of the economy. However, the specific information considered by the public to be revealed is not clearly understood. We investigate this question and find that the information revealed by monetary policy decisions is regarding future output growth, not inflation, and that such an information effect is theoretically optimal and does not make interest-rate policies self-defeating. Read More

  • Skills Are Bridges Not Gaps: A Skills-Based Approach for Transitioning Workers to Higher-Paying Occupations

    Kyle Fee

    Skills-based hiring practices—those that prioritize skills necessary to succeed in a role over formal educational credentials—show potential for securing higher positions for lower-wage workers and helping employers get the workers they need. Read More

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