Fed's Musalem (2028 voter) says further interest rate cuts not advisable, policy is now neutral and the economy does not need stimulus

• Expects inflation to decline towards 2%, but sees a risk it could remain above 2% for longer.
• Not all of current inflation is from tariffs.
• Risk of a significant job market downturn has fallen.
• Hopes productivity growth continues, but notes it's too early to depend on it.
• Risks are balanced, further rate cuts only needed if the job market were to decay or inflation falls.
• Expects economy to continue growing above trend, boosted by credit conditions and fiscal policy.

Musalem's comments indicate a more neutral stance on monetary policy and suggest that rate cuts are not currently necessary. His view reflects a balanced risk outlook, implying that the Fed may maintain its current strategy unless significant downturns in the job market or inflation metrics change. This could bolster the USD and stabilize fixed income markets as traders reassess their expectations for future rate moves.