Musalem signals support for additional hikes, citing inflation above the Fed’s 2% target and core inflation projections of 2.5%-3%.
St. Louis Federal Reserve President Alberto Musalem indicated support for further interest rate hikes, emphasizing that inflation remains elevated above the central bank’s 2% target. He backed rate increases at the latest policy meeting and warned that gradual hikes are preferable to abrupt adjustments to avoid economic disruption.
Musalem projected core inflation to likely settle between 2.5% and 3%, reinforcing concerns over persistent price pressures. He dismissed the labor market as a current inflation driver but stressed the need for continued monetary tightening to ensure price stability.
The remarks align with a hawkish stance, suggesting the Fed may maintain higher rates for longer to curb inflation. Markets are closely monitoring Fed signals for future policy direction amid mixed economic data.