Economy Expects Continued Growth but Sees Risks
St. Louis Federal Reserve President Alberto Musalem expressed confidence in the US economy's continued expansion this year, but acknowledged that recent weaker-than-expected consumption and housing data have raised concerns about possible risks to growth. The labor market remains healthy, and financial conditions are supportive, but these positive trends are tempered by mixed reports from business contacts and slowing business activity. Despite these cautionary signs, Musalem expects the economy to grow at a good pace in coming quarters.
- The Federal Reserve's "patient" approach to monetary policy may be tested if inflation expectations continue to rise, prompting officials to reconsider their stance on interest rates.
- How will policymakers balance the need to control inflation with the risk of slowing down economic growth and potentially exacerbating labor market imbalances?