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Investing.com -- Federal Reserve Bank of St. Louis President Alberto Musalem indicated Friday that while he could support a rate cut if labor market risks emerge, the central bank should not follow a preset course and must remain cautious.
Speaking at an event in Washington, Musalem emphasized that the Fed "hasn’t finished the job on inflation" and stressed the importance of caution in the current economic environment.
Musalem noted that housing services inflation has been showing a positive trend, but pointed out that other components of services inflation remain sticky.
Looking ahead, the St. Louis Fed president said he expects businesses to begin passing on tariffs to consumers starting in the fourth quarter of 2025. He projected that these tariffs would continue to work through the economy over the next two to three quarters.
The comments come as policymakers weigh economic data to determine the appropriate path for monetary policy amid ongoing inflation concerns.
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