After Federal Reserve Chairman Jerome Powell’s comments at the Jackson Hole Economic Symposium hinted at a rate cut at the Fed’s September meeting, will the economy adjust accordingly after rates have remained elevated for an extended period of time?
Former Cleveland Fed President Loretta Mester spoke with Yahoo Finance Fed reporter Jennifer Schonberger to discuss Powell’s speech and whether the economy can adapt quickly without being too affected.
Mester argues that central banks still need to be vigilant in responding to possible headwinds: “You have to be mindful of those headwinds, and you have to be looking at other scenarios that could happen. There could be shocks that we don’t anticipate. A lot can happen in the economy.”
She thinks it’s entirely possible for the Fed to achieve a soft landing scenario, but officials “are cautious.” [themselves] In my position [they] We can adapt to possible risks.”
You can watch Federal Reserve Chairman Jerome Powell’s full speech here.
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This post was written by Nicholas Giacobino