Fed's Mester: Monetary policy is in a good place. Fed can cut later this year.

Fed's Mester is on the wires saying:Monetary policy in good place to assess what’s next for ratesFed can lower rates later this year if economy performs as expectedWhen Fed cuts rates will likely be at gradual paceIf inflation doesn't fall Fed can maintain current policyInflation must be moving sustainably lower to open rate cut doorExpects to move back to 2% inflation over timeSees growth and employment moderating this yearMust be attentive to risk labor market will cool faster-than-expectedRecent news on inflation has been ‘encouraging’Can't be sure last stage of move to 2% inflation will be swiftSo far Red Sea trouble hasn’t rattled supply chainsIt would be mistake to cut rates prematurelyPossible inflation may be more persistent than expectedWage gains still too high for getting to 2% inflationHigher productivity levels may change wage-inflation calculusMester is a voting member on the Fed this year, but will also be retiring from the Fed in July. This article was written by Greg Michalowski at www.forexlive.com.