Federal Reserve's Musalem urges caution in rate cuts, predicts strong economic rebound in the first quarter of next year

Jinse Finance reported that Federal Reserve's Musalem stated he expects the US economy to rebound strongly at the beginning of next year, highlighting the need for officials to be cautious regarding additional rate cuts. He mentioned factors such as fiscal support, the impact of rate cuts already implemented, and deregulation. Musalem reiterated his view that the current Federal Reserve policy is already close to a level where it no longer exerts downward pressure on inflation. "We must act cautiously, and this is very important, because I believe there is limited room for further rate cuts; otherwise, monetary policy will become excessively loose." After two rate cuts this year, Federal Reserve officials are divided on how much further easing is needed. Federal Reserve Chairman Powell stated last month that a rate cut in December is not a foregone conclusion. Several officials who have spoken since the central bank's October meeting have also advocated for pausing rate cuts in December, emphasizing the need to curb inflation that remains above target.