Fed’s Musalem: Costs of easing too much outwiegh easing too little

St. Louis Fed President Alberto Musalem speech, “Financial Conditions, the Economic Outlook and Monetary Policy,” at a Money Marketeers of New York University Inc. event.

• More rate cuts likely given economic outlook.
• Won’t predict timing or size of future Fed easings.
• Personal rate outlook is above Fed’s median view.
• Costs of easing too much outweigh easing too little.
• Supported Fed’s decision last month to cut rates by 50 basis points.
• Policy patience has served Fed well.
• Cooler job market still consistent with strong economy.
• Expects inflation pressures to continue to abate.
• Expects inflation to converge to 2% over next couple of quarters.
• Financial conditions remain supportive of growth.
• Some economic activity slowed by rate policy, election uncertainty.

I stuck that “Costs of easing too much outweigh easing too little” into the main headline of the post. I think its indicative of a push back against expectations of another 50bp cut at the next meeting (November 6 and 7)

This article was written by Eamonn Sheridan at www.forexlive.com.