Fed's Musalem: More data is needed to decide whether a September rate cut is warranted

St. Louis Federal Reserve President Alberto Musalem said on Friday he will need more data before deciding to support a rate cut at the September meeting, warning inflation remains above the Fed's 2% targe, per Reuters.

Key quotes

It is real that inflation is running closer to 3% than to 2%. That's real, and there is a possibility, not the base case, that there could be some persistence.

So that's one risk against the unrealized risk, not real yet, of a potential labor market deterioration.

Policy now is in the right place for a full employment labor market and inflation running above target. It's in the right place ... to be leaning against inflation.

But that's at a full employment labor market. If you happen to assess there's risk to the labor market, then that initial policy setting needs to be adjusted.

I will be updating my outlook and balance of risks all the way up and until two days, three days before the meeting.

Then I'm going to decide.

Market reaction

At the time of press, the US Dollar Index (DXY) was up 0.09% on the day at 97.80.