The unfolding conflict in Ukraine could have an effect on the US economy in the medium term and should be taken into account when Federal Reserve policymakers remove stimulus, Cleveland Fed Chair Loretta Mester said this week. Thursday (24th).
These geopolitical events could worsen inflation and hurt economic growth in the short term, said Mester, who has a vote this year in the US central bank’s monetary policy decisions.
“The implications of the unfolding situation in Ukraine for the medium-term economic outlook in the US will also be considered in determining the appropriate pace to remove the stimulus,” Mester said in prepared remarks for a virtual event hosted by Lyons Companies and the University of Delaware.
Mester reiterated his view that the pace of interest rate hikes will depend on what happens to inflation, likely to accelerate if the rise in prices does not moderate by mid-year and decelerate if inflation cools faster than expected.
She said she expects inflation to moderate in 2022 as demand cools and capacity constraints are resolved, but remain above 2% this year and next.
Source: CNN Brasil
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