Musalem says the Federal Reserve may need to raise interest rates again to lower inflation
智通财经2026/10/08 20:41The 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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