MNI BRIEF: Fed's Musalem: Looking For More Evidence Of Disinflation
MNI (WASHINGTON) - St. Louis Fed President Alberto Musalem said Thursday he seeks further signs that inflation will converge on 2% after an "encouraging" June CPI report.
"CPI inflation for June points to encouraging further progress towards lower inflation. Notably the core CPI increased just 0.1% in June, with the declining goods prices offsetting a modest increase in services prices," he told a business forum in Little Rock, Ark. "I will be looking for more evidence that inflation can be expected to converge to 2% going forward."
The labor market has also cooled and is now similar to how it was pre-pandemic, "strong but not overheated," he said. Musalem in his first public remarks last month said it "could take months, and more likely quarters" before he's confident that a reduction in interest rates is appropriate. (See: MNI INTERVIEW: Fed Might Need Bigger Cuts If It Waits Too Long)