Fed’s Musalem: I could support a path with another cut if more risks to jobs

Forex Short News

The Fed’s Musalem:

  • I could support a path with another cut if more risk to jobs emerge and inflation remains contained
  • Fed should not be on a preset course, and followed balance approach
  • Sees limited space before rate cuts would make policy accomodative
  • Important for the Fed to be cautious right now
  • Does not make decisions on one data point amid broader shutdown.
  • Important for the Fed to go meeting by meeting on policy deliberation
  • Weare in a particulary uncertain moment
  • It is premature what to say comes with FOMC meetings after October
  • Tariff impact still flowing into the economy
  • Tariffs will work through the economy into the middle of next year
  • Retailer are feeling increased pressure to pass on tariffs
  • Consumers facing firms facing more trouble passing throuh tariffs
  • Purchasing power still an issue for many Americans
  • Inflation is still a very big thing for consumers
  • it is really important for the Fed to get inflation back to 2%.
  • Some are saying non-interest rate related costs matter more right now.
  • Tariffs don’t appear to be passing through to services.
  • Services inflation has been at high level, need more work to lower.
  • He is totally committed to a target of 2%, believes Fed supports the same.
  • By 2nd half of 2026 will move back toward 2% inflation, but needs policy to lean against inflation.
  • Business contacts say that the jobs market has cooled.
  • Labor market is not a source of inflation.
  • The job market is near full employment right now.
  • Job gains have been affected by immigration changes
  • job market breakeven is between 30,000 and 80,000.
  • We could see negative payroll prints but unemployment may not move.
  • It is not seeing any increase in layoffs.
  • We are not in imminent problem for job market but risks have increased.
  • Monetary policy is somewhere between restrictive and neutral.
  • Financial conditions are accommodative right now
  • Equity prices are not a key part of thinking about the economy.
  • He always have to worry about credit market risks.
  • Credit conditions are really good now.
  • Low probability that the Fed leader will not be qualified

This article was written by Greg Michalowski at investinglive.com.