The Federal Reserve may need to raise interest rates further to bring inflation back to the 2 percent target, according to St. Louis Fed chief Alberto Musalem. He told Reuters. Musalem believes that monetary policy remains accommodative despite last week’s rate hike.
The Fed then raised its policy rate for the first time in more than three years to a range of 3.75–4 percent and signaled another hike before year-end. Musalem believes that early and gradual rate hikes would be less disruptive than larger tightening measures later on.
