Federal Reserve's Moussallem: Inflation risk is surpassing employment risk

Golden Finance reported on May 6 that St. Louis Fed President Musalem said there is significant uncertainty regarding the outlook for the U.S. economy and monetary policy, but he believes that relative to employment risks, the risks currently facing inflation are rising. Musalem said on Wednesday: “Inflation is clearly above our 2% target level. We face risks on both employment and inflation. Based on my understanding, the risks are tilting more toward inflation rather than employment.” Musalem said the Federal Reserve’s benchmark policy interest rate is currently at a neutral level that neither stimulates nor restrains the economy, or it may be slightly biased toward easing. He said, “There are very reasonable scenarios that require us to keep the current policy interest rate unchanged for a period of time.” However, he also noted that he sees some scenarios that may require officials to further cut interest rates or raise them.