Policy Panel Opening Remarks at Hoover Monetary Policy Conference

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May 9, 2025

St. Louis Fed President Alberto Musalem participated in a panel at the Hoover Monetary Policy Conference: Finishing the Job and New Challenges. He shared his views on monetary policy in his opening remarks at the event in Stanford, Calif.

The panel also included Isabel Schnabel, member of the European Central Bank’s Executive Board; Beth Hammack, president of the Federal Reserve Bank of Cleveland; and Lisa Cook, member of the Board of Governors of the Federal Reserve System. The panel was moderated by Peter Henry of the Hoover Institution.

Key Takeaways from President Musalem’s Remarks:

  • Monetary policy is currently modestly restrictive and, I believe, appropriately so for an economy at full employment with inflation above target and some measures of inflation expectations moving higher.
  • Trade policy changes from the beginning of April are likely to move employment and inflation in opposite directions. Monetary policy can manage the resulting trade-off by weighing the size and persistence of inflation’s deviation from target and that of the employment shortfall.
  • Beyond tariffs, I am also focused on the net total impact of evolving fiscal, immigration and regulatory policies on the economic outlook.
  • I consider it prudent to navigate according to two key principles. First, I continuously update my outlook for the U.S. economy and my assessment of the balance of risks with incoming information to discern the most likely scenario and appropriate monetary policy. Second, prioritizing well-anchored inflation expectations is crucial to ensure that a policy approach that responds both to inflation deviations from target and to employment shortfalls remains feasible.
  • I believe the FOMC’s current monetary policy stance aligns with these principles and is best positioned to deliver stable prices and maximum employment for the people we serve.