Cleveland Federal Reserve Bank President Loretta Mester told Boersen-Zeitung in an interview published on Tuesday that the cost of undershooting when it comes to the monetary policy still remains higher compared to overshooting.
"If we end up raising interest rates too much and the economy loses momentum more than necessary, we can lower interest rates. In the other case, if inflation picks up too much, the fight becomes much more difficult," she explained. Mester did mention that the central bank doesn't have plans to continue hiking interest rates "until inflation has already fallen to 2%," nor will it wait "to lower interest rates until inflation is at 2%."
Although the United States economy "is doing quite well," Mester said that in her own forecast, she expects "growth to slow to below trend growth." Nonetheless, she added that this hasn't been evident "in the numbers."