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Musalem flags more Fed tightening to bring inflation to 2%

The St. Louis Fed president said inflation is being pushed by persistent demand pressures and supply shocks.

Reported · Written up by our desk · Central Banks

St. Louis Federal Reserve President Alberto Musalem said inflation remains elevated and that bringing it back to the Fed’s 2% goal will require additional “monetary policy firming,” according to FXStreet.

Speaking at an event organized by the Minneapolis Fed, Musalem added that he expects contacts within the St. Louis Fed’s jurisdiction to focus on inflation rather than job-market concerns, describing the economy as “pretty strong.”

FXStreet reported that Musalem attributed inflation’s persistence to ongoing demand pressures and supply shocks, and he said the Fed can concentrate on lowering the cost of living rather than cooling employment.

He also indicated that interest rates “ought to be going up” over the next 6 to 9 months, while saying he does not see job-market worries as necessary to reduce inflation.

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