Federal Reserve official Musalem calls for strong constraints on inflation.

Alberto Musalem, President of the St. Louis Federal Reserve, stated that due to inflation exceeding the Federal Reserve's 2% target, decision-makers cannot afford to tolerate higher inflation while waiting for the possibility of stronger productivity growth. "In this context, it is crucial for monetary policy to impose a strong constraint on core inflation, rather than tolerating higher inflation today in pursuit of future productivity growth," Musalem said in remarks prepared for an event in So Paulo. He added, "The most valuable contribution the central bank can make to long-term economic growth is to provide a stable price environment, allowing businesses to plan their investments and innovations accordingly, which in turn drives growth." Musalem, who does not have a voting role in monetary policy this year, expressed last week that he leaned towards raising interest rates by 25 basis points in the recent meeting. He also noted the subsequent sell-off in U.S. Treasury bonds, highlighting the importance of maintaining the Federal Reserve's credibility.