Fed’s Musalem Says It Would Be ‘Unadvisable’ to Lower Rates (1)

Federal Reserve Bank of St. Louis President Alberto Musalem said officials should hold off from lowering interest rates further at this time to prevent stoking inflationary pressures.

“With inflation above target and the risks to the outlook evenly balanced, I believe it would be unadvisable to lower the rate into accommodative territory at this time,” Musalem said Friday in remarks prepared for an event in Rogers, Arkansas.

“Aside from risking higher or more persistent inflation, easing could be counterproductive for the labor market by raising inflation expectations and long-term interest rates, thus slowing the economy and hurting employment,” he added. ...