Reuters reports that Federal Reserve Bank of Cleveland President Loretta Mester said Thursday that while there are some new hopeful signs of moderating inflation, the main risk still facing the US central bank is that it doesn’t act aggressively enough to tame very high price pressures.
“Given the current level of inflation, its broad-based nature, and its persistence, I believe monetary policy will need to become more restrictive and remain restrictive for a while in order to put inflation on a sustainable downward path to 2%,” Mester said in a speech text.
She said“despite the moves we have made so far, given that inflation has consistently proven to be more persistent than expected and there are significant costs of continued high inflation, I currently view the larger risks as coming from tightening too little.”
“This morning’s October CPI report also suggests some easing in overall and core inflation,” she said.
“There continue to be some upside risks to the inflation forecast.”
Meanwhile, the greenback has crumbled below a key level of daily support:

The bulls could look to engage from deeper down around the upper quarter of the 107 area as illustrated above, should they be of the mind that even when Fed policy rates peak, that they are likely to remain higher for longer.
“There continue to be some upside risks to the inflation forecast,” could be the key comment to take away from Mester today.
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