Federal Reserve's Moussali: Current interest rate setting remains appropriate

Odaily Planet Daily News: On Wednesday, James Bullard, President of the Federal Reserve Bank of St. Louis, said that the Fed’s current interest-rate stance is likely to remain appropriate for the foreseeable future, and that he may support the next rate cut or rate hike depending on how the economy evolves. Bullard said that the Fed’s 3.5%-3.75% interest-rate target is a better balance when facing risks such as persistent inflation and signs of vulnerability in the labor market that have emerged in recent months. The interest-rate target may be on the lower end of the neutral range, indicating that if the Fed were to cut rates further, it could unintentionally boost inflation. Bullard noted, “Policy can effectively manage the risks to the dual mandate, and I expect the current level of the policy rate will still be appropriate for some time.” He said that if the labor market weakens and rate cuts would not undermine the Fed’s credibility in fighting inflation, he may ultimately support further rate cuts. But he also said that if inflation rises, or if the public loses confidence in how the Fed is responding to inflation, he may support a rate hike. (Jin10)