Fed's Mussallem: Economic growth to fall below trend, inflation risk to rise

PANews, April 9 (Bloomberg) -- The Federal Reserve's Mussallem said U.S. economic growth could fall ‘sharply’ below trend levels, and that the unemployment rate will rise over the course of the year as businesses and households adjust to higher prices pushed up by new import tariffs, according to Golden Ten. prices. I don't have a baseline for a recession, but I think growth could be well below trend," Mussallem said, estimating growth at around 2 per cent. ‘There are risks in both directions that will materialise,’ he said, with higher-than-expected tariffs putting pressure on prices, falling confidence and the recent sharp fall in the stock market potentially dampening spending and hitting household wealth, and rising prices taking their toll, which together will lead to slower growth. Mussallem, who has a vote on interest rate policy this year, said the response of monetary policy will depend on how inflation and unemployment evolve in the coming months, whether price shocks persist and whether inflation expectations are in line with the Fed's 2 per cent inflation target.