Fed’s Musalem Says a Rate Hike Is Needed ‘Soon’
He said the Fed should tighten sooner in smaller steps, noting inflation was above 3% and markets priced a 76% chance of a rate hike.
- On Friday, St. Louis Federal Reserve President Alberto Musalem said higher interest rates will be needed in the near future to rein in ongoing inflation.
- The Federal Open Market Committee voted 10-2 this week to hold rates steady at 3.75%-4.00%, though Musalem warned that inflation remains 'too high' relative to the Fed's 2% goal.
- Dallas Fed President Lorie Logan argued the committee needs to implement 'at least two more 25-basis-point rate increases' to restrict the economy and reach the central bank's inflation target.
- Fed funds futures traders are pricing in a roughly 76% likelihood of the Fed lifting rates at its December meeting, according to CME's FedWatch tool.
- Musalem suggested 'incremental adjustments made earlier are usually less disruptive,' while Fed Chairman Kevin Warsh has remained reluctant to provide similar guidance about the interest rate outlook.
21 Articles
21 Articles
The head of the Federal Reserve in Dallas Laurie Logan called for an increase in US interest at least two additional times, by one quarter of a percentage point per increase, warning against continued inflation above target despite the decision to stabilize interest.
Fed’s Musalem Says More Rate Hikes Needed Soon to Tame Inflation
The president of the Federal Reserve (Fed) of St. Louis, Alberto Musalem, said on Friday (30) that new restrictions on monetary policy will soon be needed in order to bring inflation back to the target in due time. He also said that the Fed funds and financial conditions remain in an accommodative territory, even after the increase in interest rates in September. In a speech published earlier, Musalem outlined two scenarios for the direction of …
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