Federal Reserve Bank of St.Louis director, Alberto G.Musalem commented today US economy and interest rates policy. He pointed to rising inflation risk, while the US labor market is cooling; monetary policy is still moderately restrictive, according to his statement. Also, Tom Barkin from the Federal Reserve commented US economy today. Overall, Fed member point to slowing pace of interest rate cuts in 2025. Here are the highlights from both speeches.
Fed Musalem
- The risk that inflation won’t cool fast enough has risen. Inflation has been higher than desired; there are worries about the job market being down.
- There is uncertainty about monetary policy, and the election has weighed on the economy. Monetary policy is moderately restrictive.
- Chances of labor market trouble are low right now. I expect that restrictive monetary policy will continue to cool inflation.
- It’s possible to pause on cuts at upcoming Fed meetings. Monetary policy is well positioned for what lies ahead.
- The labor market no longer overheated, a source of inflation risk. I expect moderation in economic growth and hiring.
- It is important to keep monetary policy options open amid uncertainty. I expect inflation to move to 2% target over the next two years.
- The time may be approaching to slow or pause interest rate cuts. Additional policy easing likely needed over time. Asset valuations are elevated.
Fed Barkin
- We want to get to a somewhat restrictive policy. We can’t ignore the October jobs report, and also inflation is still above 2%
- I expect overall housing inflation to decline over time. I’m encouraged with where inflation is headed.
- I see positives and risks on both sides of Fed’s mandates.
- If inflation is high in Q1 2025, that would be a signal that we have a lot more to do.
EURUSD loses 0.3% ,pressured also by political instability in France.
Source: xStation5
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