Federal Reserve Bank of St. Louis President Alberto Musalem supports an interest rate cut at the end of the month, but warns against excessive easing of credit due to inflation risks. Musalem expressed willingness to reduce the policy rate further if necessary for the labor market and inflation expectations remain anchored. The Fed is expected to cut rates at the Oct. 28-29 meeting. Musalem cautioned about potential inflation persistence from tariffs and labor market changes. Fed officials are leaning towards rate cuts, despite trade tariff concerns impacting inflation. Musalem predicts tariffs will drive up inflation in the short term but should wane by 2026.

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