St. Louis Fed President Alberto Musalem explained that policymakers need to maintain equilibrium between controlling inflation through tariffs and avoiding labor market deterioration from growth slowdown.
Musalem addressed the public on Friday to explain that price effects from tariffs will disappear but there exists a possibility that inflation will continue. The economy has operated below its potential level during this year which generates potential risks for employment.
Musalem who serves as a voting member for this year’s policy decisions did not express his position regarding a September rate reduction. The July employment figures indicated lower hiring rates and increased unemployment which Musalem acknowledged during his support for maintaining interest rates between 4.25% and 4.5%.
