MNI BRIEF: Fed's Musalem - Time May Be Nearing For Lower Rates
MNI (WASHINGTON) - St. Louis Fed President Alberto Musalem said Thursday the time could be nearing for the Federal Reserve to reduce interest rates as inflation continues to fall and the job market no longer looks overheated.
"The time may be nearing when an adjustment to moderately restrictive policy may be appropriate," he said, a shift in tone for an official who until recently remained skeptical of the need for near-term rate reductions.
"Absent further shocks the economy, inflation seems to have returned to a path consistent with 2% over time," he said.
His comments come after a balanced set of CPI, retail sales and jobless claims data cemented expectations in financial markets for a rate cut from the Fed next month. Musalem said inflation risks appear to have receded while the job market is coming into better balance. (See MNI: Fed Seen Sticking To 25BP Sept Cut Post-CPI)