Federal Reserve Musalem: Further interest rate hikes may be needed in the next 6 to 9 months

St. Louis Fed President Musalem emphasized on October 9 that the Fed needs to raise interest rates again to push inflation back to the 2% target. He pointed out that monetary policy needs to be further tightened to ensure that inflation targets are achieved within a "timely" time frame. Musalem believes that if "timely" corresponds to a time frame of about 18 months, interest rates may need to continue to increase at an appropriate time in the next 6 to 9 months. Inflation is still the main challenge for the U.S. economy, but he also said that strong economic growth and a stable job market provide room for policy adjustments, making it possible to control inflation without significantly affecting employment. When asked about the decision to raise interest rates at the October 27 - 28 interest-rate meeting, Musalem admitted that the outcome had not yet been predicted, but reiterated that the inflation situation required policymakers to continue to review the possibility of tightening policies. He added that despite the significant rise in U.S. bond yields, the financial environment remains loose and supports economic growth. Musalem explained that the rise in yields reflected market expectations that real interest rates would rise and increased capital competition in the context of a better economy, rather than a sign that investors have lost confidence in the Fed.