Federal Reserve's Mester: Rates Should Rise Above 5%, Stay for Some Time

The video discusses the Federal Reserve's approach to managing inflation through monetary policy. It highlights the need for a restrictive policy stance, with the Fed funds rate potentially exceeding 5% to maintain positive real rates. The duration and extent of this policy depend on inflation trends, demand slowdown, and supply challenges. Future policy assessments will focus on the implications for inflation and employment.

What role does demand play in the assessment of inflation expectations?

What challenges are being resolved that may affect price pressures?