US Fed's Mester: sees rates rising, but tariffs add uncertainty - Reuters

The head of the Cleveland Federal Reserve Bank, Loretta Mester, spoke at Princeton University today, followed by a quick Q & A. Mester leans on the hawkish side of policy,  but Loretta struck a more middling tone today based on Reuter's notes.

Key highlights (Reuters source):

Mester sees further rate hikes from the US Fed both this year and next, but she stressed that "gradual increasing" does not mean a rate hike at every FOMC meeting, and Mester also stated that she expects fiscal stimulus to boost GDP growth by 0.5% over the next few years, if not more. Loretta also anticipates GDP growth to hit or beat 2.5% year-on-year, though she did point out potential slack in the employment market, and the downside risks that NAFTA renegotations and tariffs pose to the US economy. Loretta went further by stating that the flat yield curve on Trasury bonds is not an indicator of weakness in the US economy, stating that other "strctural factors" are at play. Mester finished off her talk by pointing out that the US needs to attain a sustainable fiscal position, and that risiing debt casts uncertainty over growth potential for the American economic landscape.