Loretta Mester, the president of the Cleveland Federal Reserve, announced her retirement scheduled for June 2024. Known as a "policy hawk," Mester has been a significant figure in the Federal Reserve system, particularly recognized for her approach to inflation control. The Cleveland Fed is currently conducting a search for her successor.
Mester's announcement, made today, comes in the wake of concerns she raised about potential inflation tied to rising oil and gas prices. These concerns could have a considerable impact on the Federal Reserve's policy rate. While interest rates have remained steady, the Federal Reserve anticipates a future hike and is planning to maintain high rates.
Mester's career at the Federal Reserve began in 1985 at the Philadelphia Fed. She started as an economist, eventually ascending to the position of top economic advisor and later serving as executive vice president. In June 2014, she assumed her role as president at the Cleveland Fed.
Her retirement is part of a larger leadership transition within the Federal Reserve system. Over the past year, new appointments have been made at regional Feds in Boston, Chicago, Dallas, and Kansas City. Additionally, following James Bullard's departure in August, the St. Louis Fed is also searching for a replacement.
The Federal Reserve system comprises a seven-member board in Washington and 12 regional banks nationwide. It operates on rotating votes on interest-rate decisions from its regional presidents. Notably, only the New York Fed president holds a permanent voting position.
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