Federal Reserve's Harker: Favors a more hawkish stance, current policy is close to neutral

Jinse Finance reported that Cleveland Federal Reserve President Loretta Mester stated she prefers interest rates to be slightly on the restrictive side to continue putting pressure on still-elevated inflation. “Currently, our policy is roughly at a neutral level,” Mester said on Friday. “I lean toward adopting a slightly more restrictive stance to help maintain pressure on inflation.” Mester does not have voting rights this year but will be eligible to vote in 2026. When asked whether she supported this week’s rate cut decision, she did not answer directly, only saying it was a “complex decision” as policymakers are facing dual pressures from their dual mandate. Mester also said she looks forward to key inflation and employment data to be released in the coming weeks, which will help policymakers better assess the economic outlook. She also pointed out that the Federal Reserve lacks appropriate tools to address structural changes in the economy.