'PERIOD OF UNCERTAINTY': St. Louis Fed president issues warning over tariff shift

• PCE inflation accelerated to 2.9% annually in December, complicating hopes for early summer rate cuts, with June rate cut chances dropping from 70% to 52.1%.
• Musalem views the Fed's current policy as 'well-positioned' to respond to inflation or employment, with a neutral real rate being appropriate given the economic outlook.
• He believes Kevin Warsh is a 'very good pick' for Fed Chair, emphasizing the FOMC's collegial, evidence-based debate process.

St. Louis Fed President Alberto Musalem discussed sticky inflation, the Fed's monetary policy, and the impact of a Supreme Court tariff ruling. He noted that inflation is running closer to 3% and that the Fed's policy is well-positioned to address both inflation and employment, suggesting a neutral real rate is appropriate. He also commented on the nomination of Kevin Warsh as a good pick for Fed Chair.