St. Louis Fed branch chief Musalem said more data is needed before deciding on a September rate cut, warning inflation remains closer to 3% than 2%. He struck a more cautious tone than Powell, noting labor market risks have yet to materialize and stressing the decision will hinge on upcoming jobs data.
Musalem spoke with Reuters.
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St. Louis Fed President Alberto Musalem said he needs more data before deciding whether to back a rate cut at the September 16–17 FOMC meeting. He noted inflation is running closer to 3% than the Fed’s 2% target and could prove persistent, while risks to the labor market have not yet materialized.
Musalem said policy is currently “in the right place” — leaning against inflation in a full-employment economy — but could need adjustment if job market risks rise. He stressed that his decision will depend on incoming data right up to the meeting, including August’s jobs report.
While Fed Chair Jerome Powell earlier suggested a cut “may” be warranted as tariff-driven inflation fades and labor risks mount, Musalem’s comments underscored reluctance among some policymakers to ease while inflation remains above target. He added that he is focused on the full path for policy, not just one meeting.
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The Federal Open Market Committee (FOMC) next meet on September 16-17.
The big news was from Federal Reserve Chair Powell:
