Fed's Musalem: Tariffs are feeding through to inflation

St. Louis Federal Reserve President Alberto Musalem told CNBC on Monday that tariffs are feeding through to inflation, which is running close to 3%.

Key takeaways

"Expecting most of the impact of tariffs on inflation to fade in 6 to 9 months, but it could be more persistent."

"Economy is around full employment."

"There are some signs of labor market weakening."

"Take a meeting by meeting approach and bring an open mind each time."

"Have revised sense of labor risks slightly higher, inflation risks slightly lower."

"Will further revise view as more data comes in, too early to say what is the right decision for September."

"Seeing risks that inflation could be more persistent, still only three months into the period of higher tariffs."

"Economy is growing slightly less than 1%, posing downside risks to the job market."

"Not hearing from businesses that they are on the verge of layoffs."

"Elected officials are entitled to have views about monetary policy, but the fed's job is to listen to main street, businesses in the district."

Market reaction

These comments by Musalem received a neutral score of 5.4 from FXStreet Fed Speech Tracker. Meanwhile, the US Dollar Index stays in positive territory at around 98.00.