St. Louis Fed President Alberto Musalem speech, “Financial Conditions, the Economic Outlook and Monetary Policy,” at a Money Marketeers of New York University Inc. event.
- More rate cuts likely given economic outlook.
- Won’t predict timing or size of future Fed easings.
- Personal rate outlook is above Fed’s median view.
- Costs of easing too much outweigh easing too little.
- Supported Fed’s decision last month to cut rates by 50 basis points.
- Policy patience has served Fed well.
- Cooler job market still consistent with strong economy.
- Expects inflation pressures to continue to abate.
- Expects inflation to converge to 2% over next couple of quarters.
- Financial conditions remain supportive of growth.
- Some economic activity slowed by rate policy, election uncertainty.
I stuck that “Costs of easing too much outweigh easing too little” into the main headline of the post. I think its indicative of a push back against expectations of another 50bp cut at the next meeting (November 6 and 7)
Alberto G. Musalem