Fed official Mousalem expressed skepticism about further rate cuts, at odds with financial marekts' widespread expectation that the Fed will continue to cut borrowing costs this year. Mousalem said he supported a 25 basis point rate cut last week because he saw increased risks to the labor market.
But with inflation almost a percentage point above the Fed's 2 per cent target, further cuts could signal excessive complacency with rising prices. "If the public begins to doubt whether inflation can return to the 2 per cent target, the work of restoring price stability will become more difficult and potentially more costly to the economy." Traders are betting that the Fed will cut rates by another 50 basis points at its two remaining meetings this year. He is also at odds with the new Fed governor, Milan, who opposed a small rate cut at last week's meeting in favour of a larger cut.
The Federal Reserve's Musalem is skeptical of further rate cuts
2025-09-22 14:21:52
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