St. Louis Federal Reserve Bank President Alberto Musalem joined a group of central bank officials on Thursday who believe the Federal Reserve should have raised its interest rate target the previous week.
"The federal funds rate is our primary tool for implementing monetary policy, and during the meeting I expressed a preference for raising the federal funds rate by 25 basis points," Musalem said during a speech in Brazil.
The official stated that the main reason for supporting a hike in short-term borrowing costs is that if monetary policy remains at its current level, inflation relative to the 2% target could still be too high over the next year or so.
Musalem also indicated that he advocated for raising rates now because "it is more advisable to take gradual rate hikes early, as the shock and cost are smaller compared to a more abrupt rate adjustment that might be necessary later."
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