Fed’s Musalem Says There Is Limited Room for More Rate Cuts (1)

Federal Reserve Bank of St. Louis President Alberto Musalem said he supported last week’s interest-rate reduction as a way to take out insurance against a weakening labor market, but sees limited room for more cuts amid elevated inflation.

Musalem said interest rates are now “between modestly restrictive and neutral.” He said he would support further reductions if the labor market worsens further, but emphasized the importance of keeping long-run inflation expectations stable.

St. Louis Fed President Alberto Musalem.

Photographer: Kayla Bartkowski/Bloomberg

“I supported the 25-basis-point reduction in the FOMC’s policy rate last week as a precautionary move intended to support the labor market at full employment and against ...