- He needs to observe a period of favorable inflation, moderating demand and expanding supply before he will have confidence for a rate cut
- The conditions could take months, or more-likely quarters to play out
- If inflation becomes stuck meaningfully above 2% or moves higher, he would support additional tightening
- Says he will remain vigilant until inflation is clearly and convincingly on its way back to 2%
- Retail sales for May suggests aggregate demand is growing at a moderate pace so far in Q2
- Expects consumptio nto moderate in coming quarters without stalling
- Labor market no longer seems overheated but remains tight
- Expects some further cooling in the labor market in the coming months
- There are potential early signs of continued progress on inflation
- PCE should show welcome downshift in inflation in May
These are the first real comments from Musalem and he sure sounds like a hawk. He votes in 2025.