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Federal Reserve Watch for April 1: Musalem Says Current Policy Appropriate, Could Support Higher or Lower Rates as Needed

BY MT Newswires | ECONOMIC | 02:52 PM EDT

02:52 PM EDT, 04/01/2026 (MT Newswires) -- St. Louis Fed President Alberto Musalem (nonvoter) said that he could support rate decreases or rate increases depending on what conditions require but added that he believes that the current setting of policy will remain appropriate for some time.

Recent comments of note:

(March 31) Kansas City Fed President Jeffrey Schmid (nonvoter) said that it cannot be assumed that inflation from higher oil prices will only be temporary, adding that he sees high inflation as the larger risk for the Fed currently.

(March 30) New York Fed President John Williams (voter) said that monetary policy is well-positioned to handle inflation spikes due to supply shocks resulting from the conflict in Iran.

(March 30) Fed Chair Jerome Powell (voter) said that inflation expectations remain well anchored after an expected short-term price shock from the conflict in Iran and that the FOMC has time to see if that is the case before incorporating it into policy making. Powell added that the FOMC needs to act independent of political forces and focus on inflation expectations as the FOMC lacks the tools to deal with short-term shocks.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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