Fed’s Musalem Sees US Economic Rebound in First Quarter
Federal Reserve Bank of St. Louis President Alberto Musalem said he expects the US economy to bounce back strongly early next year, underscoring the need for officials to approach additional interest-rate cuts with caution.
“We’re going to get, I think, a substantial rebound in the first quarter,” Musalem said Monday, citing fiscal support, the impact of rate cuts already made and deregulation.
Speaking with Bloomberg reporters and editors, Musalem reiterated his view that current Fed policy is close to the level where it would no longer put downward pressure on inflation.
“It is very important that we tread with caution, because I believe there’s limited room for further reductions without monetary policy becoming overly accommodative,” he said.
After lowering interest rates twice this year, Fed officials are divided over how much more to cut borrowing costs. Fed chair Jerome Powell said last month that a rate cut in December was not a foregone conclusion. And several officials speaking since the central bank’s October gathering have pushed for a pause in December, emphasizing the need to tame above-target inflation.
Source : Bloomberg.com
