Fed’s Musalem: Time may be nearing for a change in the policy rate

• Monetary policy is moderately restrictive
• Labor market is no longer overheated
• Labor market no longer clear upside risk to inflation
• Recent data have bolstered my confidence on inflation
• Risk to both sides seem more balanced
• Time may be nearing for a change in policy
• Sees GDP growth 1.5% to 2.0% in H2
• Does not think the Fed is behind the curve and says the economy is doing very well
• Sees risks to cutting too early or too late
• Models suggest interest rates going forward likely to be higher than pre-pandemic

It doesn’t get any clearer than this, he’s ready to support a rate cut in September. He’s also a voter in 2025 and sounds like he’s ready to support a rate cutting cycle.

This article was written by Adam Button at www.forexlive.com.