Fed’s Musalem Says Outlook Unchanged If Tariffs Replaced 1-for-1
Federal Reserve Bank of St. Louis President Alberto Musalem said his economic outlook won’t change significantly if the Trump administration is able to maintain most of its tariffs through alternative approaches after the Supreme Court struck down some of the president’s global levies.
“If it were a one-for-one replacement, I probably wouldn’t change my outlook very much on a go-forward basis,” Musalem said Friday during an interview with Fox Business. He would also like to understand if companies will be receiving refunds and for how much, he said.
The Supreme Court earlier on Friday struck down President Donald Trump’s sweeping global tariffs, ruling 6-3 that the president exceeded his authority by invoking a federal emergency-powers law to impose his “reciprocal” tariffs. The White House has said it will quickly replace the levies using other legal tools.
Asked about the likelihood for interest-rate cuts this year, Musalem said the Fed’s benchmark rate is at or below the so-called neutral rate, the level which neither spurs growth nor slows the economy. Fed officials appeared increasingly wary of rate cuts at last month’s policy meeting, when they decided to leave borrowing costs unchanged, according to a readout of the gathering released this week.
“For me, policy right now is very well positioned to respond to either side of our mandate, whether it’s the inflation side or the employment side,” Musalem said.
Source : Bloomberg.com
