US Fed Official Warns of Further Rate Hikes to Combat Inflation

US Federal Reserve Bank of St. Louis President Alberto Musalem has emphasized the need for further interest rate hikes to curb inflation. In an interview with Reuters, he stated that without additional policy tightening, inflation is likely to remain above the central bank's 2% target in 18 months.

Musalem described the current benchmark interest rate range of 3.75% to 4% as 'on the accommodative side', suggesting that borrowing costs are not yet sufficiently restrictive to cool growth and lower inflation.

He advocated for proactive measures, saying that moving rates up earlier and through small, incremental adjustments would be 'less disruptive' than resorting to aggressive tightening down the road.