Fed Leaders Debate: Balancing Inflation and Employment

Federal Reserve officials have expressed skepticism over the need for further interest rate cuts, citing ongoing inflation concerns despite a strong job market. Inflation remains above the central bank's 2% target, making additional cuts potentially problematic, they warned on Monday.

St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic stated separately that while recent rate cuts were appropriate to counter rising unemployment risks, inflation remains a priority. Musalem stressed caution in easing rates further, stating that policy could become overly accommodative.

The debate intensifies as Fed Governor Stephen Miran, who favored a more substantial half-point cut, plans to present his argument for further reductions. The Fed's policymakers remain divided on their approach, with differing projections through 2025.

(With inputs from agencies.)