Federal Reserve's Musalem is skeptical about further interest rate cuts
Jinse Finance reported that Federal Reserve official Musalem expressed skepticism about further interest rate cuts, which contrasts with the general expectation in financial markets that the Federal Reserve will continue to lower borrowing costs this year. Musalem stated that he supported a 25 basis point rate cut last week because he believed the risks facing the labor market had increased. However, since the inflation rate is nearly one percentage point higher than the Federal Reserve's 2% target, further rate cuts could mean excessive complacency about rising prices. "If the public begins to doubt whether inflation can return to the 2% target, the task of restoring price stability will become more difficult and may bring higher costs to the economy." Traders' bets indicate that the Federal Reserve will cut rates by another 50 basis points in the remaining two meetings this year. In addition, his view also differs from that of the Federal Reserve's new governor, Milan. Milan opposed a small rate cut at last week's meeting and advocated for a larger rate cut.
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