The
economy is likely to struggle in the near term after a rise in
coronavirus infections led to more restrictions, both voluntary
and mandated, Mester said.
While the "medium" term outlook was more promising, with
vaccines likely to help people feel safer doing certain
activities, she expects the economy to remain far from the Fed's
inflation and full employment goals.
"Monetary policy will need to remain highly accommodative for
quite some time because achieving our monetary policy goals is
likely to be a journey and not a sprint," Mester said during the
annual meeting of the Allied Social Science Associations, which
is being held virtually this year.
The policymaker said the recovery is likely to remain uneven,
with some sectors recovering more quickly than others. Inflation
is not likely to "move up quickly above" the Fed's 2% target,
Mester said.
Fed officials vowed at their December meeting to keep interest
rates near zero and to continue purchasing about $120 billion a
month in government bonds until there is "substantial further
progress" in meeting their inflation and employment goals.
Mester said on Monday the "current stance of policy is well
calibrated" to her economic outlook. She said the U.S. central
bank would adjust policy if economic performance veered from
expectations or if new risks emerged, including threats to
financial stability.
Fed policymakers remain "fully committed to using our policy
tools to achieve our goals, in support of a broad-based and
sustainable recovery," Mester said.
(Reporting by Jonnelle Marte; Editing by Sam Holmes)
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