March 03, 2025 at 05:38PM
This is a pretty sharp shift in tone from Musalem, who was leaning hawkish very recently.
Outlook is for continued solid growth but recent data pose some downside risks
Patient approach to policy will help achieve the Fed’s goals
Says he would look closely at behavior of inflation expectations if dual goals come into conflict
So far, longer-term inflation expectations remain broadly anchored
Expects economy to continue to grow but would be concerned about signs of future weakening of consumption or dampening of business confidence
Musalem is a voter this year and it looks like recent dips in economic data and markets have him concerned. Last month he said he needed “assurances” inflation was returning to 2% target needed before further policy changes and that the inflation risk was higher than the jobs risk.
This article was written by Adam Button at www.forexlive.com.
