Fed’s Meister says inflation won’t fall to 2% target for two years

Cleveland Fed President Loretta Meester attends a panel convened to speak about the health of the US economy on November 18, 2015 in New York.

Lucas Jackson | Reuters

Cleveland Federal Reserve Bank President Loretta Meester said it would take two years for inflation to fall to the central bank’s 2% target, adding that it would gradually move “downward” from current levels.

The rise in inflation, which is at its highest level in 40 years, has irked nearly all Fed policymakers, with only one reporting earlier this week the central bank’s biggest rate hike in more than a quarter century. disagreed against.

“It’s not going to be immediate that we see 2% inflation. It’s going to take a few years, but it’s going down,” Meester said in an interview with CBS News on Sunday.

Meester said she was not predicting a recession, despite slowing growth.

Meester said, “We have slowing growth, which is a little below trend and we have the unemployment rate going up a little bit. And that’s okay, we want to see some slowing in demand to get it in line with supply.” Huh.” Added referring to forecasts presented last week by participants of the Federal Open Market Committee meeting.

Policymakers expect the Fed’s benchmark overnight interest rate to rise, currently in the 1.50%-1.75% range, to at least 3.4% over the next six months. A year ago, the majority thought the rate would need to stay close to zero by 2023.

On Friday, the Fed called for its fight against inflation “Unconditionally.”