St. Louis Fed's Musalem says more rate firming will be needed 'soon'

Two days after the Fed held at 3.75% to 4.00%, St. Louis Fed President Alberto Musalem said he judges more tightening will be needed soon. Mortgage rates follow longer-term yields more than the Fed's short rate.

In this brief: 3 sections 1 min read

- Musalem judged that more tightening will be needed soon. He favors smaller, earlier moves over larger, abrupt ones later. His views don't necessarily represent other FOMC members.
- Headline and core inflation at 3% or higher
- Services inflation sticky above 3%
- Goods inflation rising on higher energy prices (September PCE)
- Hike talk can push longer-term Treasury yields, which mortgage rates follow, though the Fed's short-term rate doesn't set them directly. The next Freddie Mac weekly survey is due Thursday, November 5.

Read full analysis on stlouisfed.org

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