Fed's Mousallem skeptical of further rate cuts

Federal Reserve official Mousallem has expressed skepticism about further rate cuts, contradicting the widespread expectation in financial markets that the Fed will continue to lower borrowing costs this year. Mousallem said he supported a 25 basis point rate cut last week because he saw increased risks to the labor market. However, with inflation running nearly a percentage point above the Fed's 2% target, further rate cuts could signal excessive complacency about rising prices. If the public begins to doubt whether inflation can return to the 2% target, restoring price stability will become more difficult and could impose higher costs on the economy. Traders are betting that the Fed will cut rates by another 50 basis points at its two remaining meetings this year. Furthermore, his views differ from those of new Fed Governor Milan, who opposed a smaller rate cut at last week's meeting and advocated for a larger one. (Jinshi)