According to BlockBeats, Federal Reserve official Musalem stated that the Fed's recent stance of keeping interest rates high aligns with the current inflation levels exceeding targets and a robust job market. He expressed skepticism about a potential rate cut in the Fed's September meeting.
Following Federal Reserve Chair Powell's recent remarks suggesting the possibility of rate cuts, such a move is now seen as the Fed's default option. Musalem acknowledged a slowdown in job growth but noted that the labor market remains strong due to moderate unemployment rates and low initial jobless claims.
He highlighted significant uncertainty surrounding inflation, particularly in light of tariff pressures. Despite this, traders widely anticipate that a majority of Fed members will support a 25 basis point rate cut in September, with a 90% probability.