Fed's Musalem: monetary policy is appropriately balancing risks

Feb 25 (Reuters) - ‌St. Louis ​Federal ​Reserve President Albert Musalem on Wednesday said ‌he feels the current setting ⁠of the U.S. policy rate appropriately ‌balances the current ‌economic risks, even as his baseline outlook calls for inflation ​to head back down toward 2% later this year ⁠and for the labor market to stabilize.

"If ​there were an increase in layoffs with low job ​creation, you could ‌have a risk of the labor market to ⁠deteriorate further; it's not my base case, but I think ⁠it could happen," Musalem said. "On the inflation ​side, there is a possibility that inflation could stay higher than we ‌would all like it to be for longer ... ‌these two risks in ⁠my assessment ‌are roughly balanced ​right now."

(Reporting by Ann Saphir; Editing by Chris ‌Reese)

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