WASHINGTON (Reuters) -The Federal Reserve now faces risks to both its inflation and jobs goals, with policymakers needing to balance which seems the more serious threat in deciding whether it is appropriate to reduce interest rates, St. Louis Fed president Alberto Musalem said on Friday.
Between tariffs pushing up prices and job growth slowing, “there are risks on both sides of our mandate, and when that happens, when you have risks on both sides. You have to take a balanced approach, which means you have to think about the likelihood of missing on each side of the mandate, the size of the potential miss, and how long that miss will be in place,” said Musalem, without commenting on whether he feels the Fed’s policy rate should be reduced at the next meeting in September. “That’s the balancing act that we’re doing right now.”
(Editing by Franklin Paul)
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