Fed's Mester: Comfortable with tapering some time this year

Cleveland Federal Reserve President Loretta Mester said on Friday that she is comfortable that the Fed has met the "substantial further progress test," as reported by Reuters.

Additional takeaways

"It is now a question of communicating what the policy stance is on tapering."

"Comfortable with tapering some time this year, want it completed by the middle of next year."

"There is no need for some kind of accommodation as at height of the crisis."

"Business contacts say supply constraints are more prolonged than thought."

Higher prices in some components will stay longer than Fed expected and could feed into inflation expectations."

"Watching if one-off price increases become embedded in inflation expectations."

"Very watchful on the inflation side, her view has changed and she now thinks it will be more prolonged."

Market reaction

The US Dollar Index is edging higher following these remarks and was last seen rising 0.15% on the day at 93.17.