Fed's Musalem says a rate hike is needed 'soon'
TLT•St. Louis Fed President Alberto Musalem said another rate increase is needed soon to address inflation, which he said remains above the Fed's 2% target. The Fed held rates at 3.75%-4.00% this week, and markets expect another increase in December.
1. Musalem urges rate increase
Alberto Musalem said additional monetary tightening will be necessary soon, arguing that smaller rate moves made earlier are less disruptive than larger actions later. He said inflation remains too high relative to the Fed's 2% target, faces upside risks and is unlikely to ease without Fed action.
2. Fed holds rates steady
The Fed left its policy rate unchanged at 3.75%-4.00% this week after raising rates in September. Financial markets expect another increase in short-term borrowing costs at the December meeting. Musalem does not currently vote on the policy-setting committee, but is scheduled to be a voter in 2027.
