Federal Reserve Bank of St. Louis President Alberto Musalem said there is a "distinct possibility" that inflation could reaccelerate in the near term, even as the labor market shows signs of softening. Musalem cited limited progress on disinflation since mid-2024 and noted that firms plan to raise prices due to new tariffs.
He stressed the need to "lean against second-round inflation" stemming from tariffs, warning that such pressures may prove persistent, and flagged weakening loan demand, deteriorating consumer credit conditions, and growing price sensitivity among households as key concerns for the economic outlook.
