Fed’s Mester: Growth will be strong in second half of this year

Cleveland Fed President Loretta Mester crossed wires, via Reuters, during late Thursday in the US while saying, “US economy will grow by 6% or more this year and the unemployment rate will drop to 4.5% or lower by year-end.”

The Fed policymaker also said that the economy has a long way to go until sustainable recovery while also suggesting that prices are going to stabilize or come down as supply chain disruptions are solved.

Additional comments...

• US economy will grow by 6% or more this year and unemployment rate will drop to 4.5% or lower by year-end.
• Sizable support from fiscal and monetary policy and vaccination deployment point to a pickup in activity in the second half of this year.
• Labor market conditions will improve if there is not a surge in virus variants resistant to vaccines
• Vaccinations, school reopenings and child-care will be important to getting people back to work
• The uptick in inflation expectations is due to better economic outlook.
• Not concerned about inflation getting too high.
• Modest increase in inflation expectations is not worrisome.

FX implications

As these comments are more or less similar to what the Federal Reserve policymakers have been saying, market players paid a little heed to the news as Asian traders prepare for a busy Friday loaded with China data.

Read: AUD/USD: Firm around a month’s high towards 0.7800, focus on China data dump