Key facts
- St. Louis Fed President Alberto Musalem will not prejudge the Federal Open Market Committee's September rate decision.
- Musalem stated that a half-point rate cut is not supported by the current state of the economy.
- He believes inflation is likely to remain above the Fed's 2% target.
- Musalem emphasized that his decision will be data-dependent.
Federal Reserve Bank of St. Louis President Alberto Musalem said on Thursday that he is keeping his options open regarding the Federal Open Market Committee's September policy meeting. Musalem, who favored an interest rate hike at the July policy meeting, indicated that his decision will be dependent on incoming economic data.
Musalem stated that a half-point rate cut is not supported by the current state of the economy, citing near full employment and inflation running above the Fed's 2% target. He also noted that businesses are still in the early stages of adapting to higher import taxes, suggesting that price pressures could prove more persistent than anticipated.