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Fed official says policy remains accommodative amid demand-driven inflation
Alberto Musalem said about half of inflation is linked to persistent demand pressure, and he argued the Fed should better explain how it turns information into policy.
St. Louis Federal Reserve President Alberto Musalem said central bank policy is still accommodative even after the most recent rate hike, pointing to demand pressures tied to an AI capital spending boom, according to FXStreet.
Musalem said inflation is being supported by persistent demand, with about half of inflation attributable to ongoing demand pressure, while he added that inflation expectations remain consistent with 2% over the long run.
FXStreet also reports that he called for clearer Fed communication, arguing that the Fed should explain how and why policy decisions are made, and he suggested improving the Summary of Economic Projections by anonymously linking the rate “dots” to economic projections.