Musalem says the Federal Reserve may need to raise interest rates again to lower inflation

智通财经2026/10/08 20:41

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The President of the Federal Reserve Bank of St. Louis, Musalem, stated that the Federal Reserve needs to raise interest rates again to bring inflation back to the 2% target level. He said that in order to achieve the inflation target within a "timely" period, monetary policy requires further tightening. Musalem indicated that if "timely" means about 18 months, interest rates may need to be further increased at an appropriate time in the next 6 to 9 months. He noted that inflation remains the main challenge facing the US economy, but with strong economic growth and a stable job market, the Federal Reserve may be able to reduce inflation without significantly hurting employment. When asked whether an interest rate hike should be considered at the policy meeting on October 27-28, Musalem expressed an open attitude, stating he has not yet made a prediction about the meeting's outcome, but the inflation situation requires policymakers to continue considering further tightening measures. Musalem said that despite the noticeable rise in US Treasury yields, financial conditions remain loose and continue to support economic growth. He stated that the rise in yields does not mean that investors are losing confidence in the Federal Reserve, but rather reflects market expectations that real interest rates will rise and that capital competition is intensifying in a strong economic environment.

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The President of the Federal Reserve Bank of St. Louis, Musalem, stated that the Federal Reserve needs to raise interest rates again to push inflation back to the 2% target level. He remarked that, in order to achieve the inflation target within a "timely" period, monetary policy needs to be further tightened. Musalem indicated that if "timely" means about 18 months, then interest rates may need to be raised further at an appropriate time within the next 6 to 9 months. He noted that inflation remains the main challenge facing the US economy, but with strong economic growth and a stable job market, the Federal Reserve may be able to curb inflation without significantly harming employment. When asked whether an interest rate hike should be implemented at the monetary policy meeting scheduled for 27–28 October, Musalem said he remains open-minded and has not yet anticipated the outcome of the meeting, but the inflation situation requires policymakers to continue considering further tightening. Musalem commented that although US government bond yields have risen significantly, financial conditions remain loose and continue to support economic growth. He said that the increase in yields does not mean investors have lost confidence in the Federal Reserve, but rather reflects market expectations of higher real interest rates and intensified capital competition in a strong economic environment.

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Musalem says the Federal Reserve may need to raise interest rates again to lower inflation

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