Fed’s Musalem notes job gains have steadied, inflation remains above target, and policy may stay restrictive for some time.
Federal Reserve official Alberto Musalem said the labor market has stabilized after a period of gradual cooling, with recent job gains hovering near breakeven levels. This suggests a balance between supply and demand in employment, following a slowdown last year.
Musalem also highlighted that inflation remains meaningfully above the Fed’s 2% target. He indicated that current monetary policy is neutral or mildly supportive in real terms, with plausible scenarios for both rate hikes and cuts depending on economic data.
The remarks underscore the Fed’s cautious stance, as policymakers weigh the need for further tightening against potential easing amid mixed economic signals.