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Fed will discuss policy stance as economy continues to improve – Loretta Mester

As the US economy continues to improve, the Federal Reserve will have discussions about policy stance in general, the chairwoman of the Cleveland Federal Reserve told CNBC on Friday, Loretta Mester.

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“The Fed is looking at what the data says and not just the forecast.”

“Some valuations in the stock market appear higher than fundamentals can support, but Fed policy is not driving that.”

“The Treasury market had problems at the beginning of the pandemic and the Fed is looking at longer-term problems.”

“Our job is to make sure the fundamentals of the market are strong.”

“It is our responsibility to monitor financial stability problems.”

“At this point, I don’t see any reason to react to what is happening in the markets with monetary policy tools.”

“We hope to see further progress on the employment front.”

“The key point is that the Fed is in tune with the risks to the upside and downside.”

Market reaction

These comments do not appear to be helping the dollar erase the losses it suffered against its rivals after the disappointing May employment report. At time of writing, the US Dollar Index was down 0.4% on the day at 90.12.

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