Ex-regional Fed president: Inflation headed lower, with interest rates likely to follow

Loretta Mester, having worked in the Federal Reserve system her entire career, rose to become president of the Cleveland Fed for a decade until her retirement on June 30. During most of her years on the Fed’s interest-rate-setting committee, Mester was likely to favor relatively higher interest rates to contain inflation. This stance earned her the label of “hawk,” which describes officials who typically worry most about controlling inflation. Yet in a recent interview Mester reiterated that should inflation keep cooling, as she and other Fed officials expect, the central bank should cut rates this year.