Federal Reserve's Moussali: Current interest rate setting remains appropriate

MeNews · 2026-04-08T10:25:25+00:00

St. Louis Fed President James Bullard stated that the current 3.5%-3.75% interest rate target is appropriate given the uncertain economic conditions and that the Fed may choose to cut or raise rates depending on economic developments. He noted that this rate target is near the lower end of the neutral zone, and further rate cuts could push inflation higher.

MeNews

2026-04-08 10:25:25

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ME News update, on April 1 (UTC+8), Saint Louis Fed Chairman Músallem said on Wednesday that the Federal Reserve’s current interest-rate stance is likely to remain appropriate for the foreseeable future, and he may support the next rate cut or rate hike depending on how the economy develops. Músallem said that the Fed’s interest-rate target of 3.5%-3.75% is a good balance when facing risks such as persistent inflation and signs of fragility in the labor market that have emerged in recent months. The rate target may be at the low end of the neutral range, which suggests that if the Fed were to cut rates further, it could inadvertently push inflation higher. Músallem said, “Policy can effectively address the risks of the dual mandate, and I expect the current policy rate level to remain appropriate for some time.” He said that if the labor market weakens and rate cuts would not damage the Fed’s credibility in fighting inflation, he may ultimately support further rate cuts. But he also said that if inflation rises, or the public loses confidence in the Fed’s ability to respond to inflation, he may support rate hikes. (Jin Ten) (Source: ODAILY)

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