Fed's Musalem (2028 voter) says US monetary policy 'well positioned,' should hold in place 'for some time'; Monetary policy is currently at the low end of the neutral range
Importance
Level 1
- War shocks have increased risks to the economy and inflation.
- Can see scenarios to both raise and cut interest rates.
- Supply shocks carry greater inflation risks in the current environment.
- He is cautious about looking through the impact of energy shocks.
- Tariffs are still an inflation driver, but their impact should wane.
- The economic outlook is highly uncertain.
- The baseline case sees good growth, moderating inflation, and stable unemployment.
- He sees unfavourable risks for both inflation and jobs.
- Financial conditions are broadly accommodative.
- He does not see broad stress from private credit issues.
- Will take some time to bring back damaged infrastructure back online.
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