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

ME News message, on April 1 (UTC+8), St. Louis Fed President Musalem 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 cut or hike depending on how the economy evolves. Musalem said the Fed’s 3.5%-3.75% target rate is a good balance in the face of risks such as persistent inflation and signs of vulnerability in the labor market that have emerged in recent months. The target rate may be on the lower end of the neutral range, indicating that if the Fed were to cut rates further, it could inadvertently push inflation higher. Musalem noted, “Policy can effectively address the risks of the dual mandate, and I expect the current policy rate level will 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 could ultimately support further cuts. But he also said that if inflation rises, or if the public loses confidence in the Fed’s ability to respond to inflation, he could support a rate hike. (Jin10) (Source: ODAILY)