Federal Reserve Jerome Powell's speech from the Kansas City Fed's Jackson Hole Economic Policy Symposium has Wall Street abuzz. Powell strongly indicated the central bank is about to start a rate-cutting cycle. The question now focuses on the magnitude of those cut rates.

Former Cleveland Fed President Loretta Mester sits down with Yahoo Finance Federal Reserve Reporter Jennifer Schonberger to discuss Powell's speech and how she views the Fed's position moving forward.

Mester thinks "the case is pretty strong" for the Fed to start cutting rates, describing it as "reducing the degree of restrictiveness."

Mester believes the Fed is right to start with a 25 basis point cut, claiming its been on the right trajectory with its policies considering inflation is moving towards its target goal of 2%: "I think a reasonable sort of baseline would be doing 25. I wouldn't want to start with a 50 because I think that is really a signal that maybe the Fed is behind the curve and I don't believe the Fed is. I think the Fed has been very careful about really focusing in on the price stability mandate when that was the dominant focus." She thinks the "desirable path" would be doing a series of 25 basis point cuts.

Watch Federal Reserve Chair Jerome Powell's full speech here.

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This post was written by Nicholas Jacobino