Fed’s Musalem: Rate Hike Risk "Greater Than Zero" as Economy Stays Resilient

Via Bloomberg TV-

• Musalem revealed that by April, he believed the Fed's easing bias was no longer consistent with economic data.
• He warned that the probability of the Fed considering an interest rate increase is "greater than zero," with future moves (hike, cut, or hold) strictly data-dependent.
• He attributes recent bond market moves to a resilient economy, higher inflation expectations, and an increase in the expected neutral rate.
• Musalem suggested that lowering the banking system's demand for reservesbwould offer a smoother path to a smaller Fed balance sheet.
• Commenting on Kevin Warsh, Musalem noted it is "refreshing" that Warsh will be asking profound questions about how the Fed operates.