Cleveland Fed President Loretta Mester said yesterday that economic data showed the the economy is recovery but it’s still a “fragile recovery”. Fed is still “far from both of our goals” for both employment and inflation. She expects unemployment to end the year between 7% and 8%. Inflation could be above 1% but well below the 2% target.
Outlook depends on the course of the coronavirus pandemic. “If things turn out that the virus remains under control and there is a vaccine that is able to be distributed, in the middle of the year, say, then we’ll see the recovery continuing and maybe broadening out a bit,” she said.
Mester also urged actions to promote an inclusive economy, “one in which people have the chance to move themselves and their families out of poverty, one in which systemic racism does not limit opportunities and one in which all people can fully participate — the U.S. economy will not be able to live up to its full potential and the country will suffer.”