Macro MATTers: A conversation with Loretta Mester on the Fed’s inflation frameworks

Welcome.

You're listening to another episode of Macro Matters on Podzept, a series where we discuss some of the best ideas coming out of Deutsche Bank research.

I'm Matt Luzzetti, Chief U.S.

Economist, and I'm once again joined by Matt Raskin, our U.S. Head of Rates Research.

Welcome again, Matt.

Thanks, Matt.

Good to be here.

So, Matt, we're back for another in our series on the Fed task forces that Chairman Warsh announced back at the June FOMC meeting.

As a reminder for the audience, DB has produced a set of research notes on each of the five task forces where we sort of outline the considerations we think they might take up and some of our expectations for where they might land.

We are also recording podcast episodes on each of those.

where we're joined by outside experts and get their perspective on things.

We've done that so far for communications and for the balance sheet.

And today we're going to talk about the Inflation Task Force.

So as outlined on the Fed's website, the task force will, quote, revisit how the Federal Reserve understands and responds to the drivers of inflation and examine the drivers of inflation, first principles, and weigh the full range of ideas for delivering price stability in a changing economy.

So that seems like a pretty important sort of central topic for the Fed.

And Matt, we are honored today to be joined by Loretta Mester.

Loretta was President and Chief Executive Officer of the Federal Reserve Bank of Cleveland from 2014 to 2024.

Of course, she was a participant and member of the FOMC for that crucial decade.

I should also note that during her time running the Cleveland Fed, they established a Center for Inflation Research, which is a forum for economists who specialize in inflation to produce commentary, research, and analysis on that topic.

Prior to joining the Cleveland Fed, Loretta had a long career at the Philly Fed, where she worked as an economist and ultimately served as research director.

She's currently an adjunct professor at Wharton and serves as director, trustee, and fellow on a wide range of organizations and boards.

So really an incredible guest for us to have today, not just on this topic on inflation, but to help us think about and understand the task forces more generally, obviously brings an incredibly valuable and unique perspective having served on the FOMC.

So Loretta, welcome, and thanks so much for joining us today.

Thank you very much for having me.

I'm looking forward to the conversation.