Federal Reserve's Musalam: US fiscal deficit could become a financial stability issue

Odaily Planet Daily News: Federal Reserve's Musalam said that the US fiscal deficit is on an unsustainable path. The future may become a financial stability issue. The current economic situation is good, and the labor market is at or near full employment. There are still some upward risks in inflation, but monetary policy is currently moderately restricted and the financial environment is relatively favorable for economic growth. Recently, some positive trends have been observed in inflation, but due to the impact of tariffs, it is expected that the inflation outlook will rise in the future. But it is currently uncertain whether tariffs will have a more lasting impact. The high profit margin provides companies with room to absorb some tariff shocks, while the depreciation of the US dollar may further drive inflation. Musalam pointed out that the specific impact of tariffs may not fully manifest until later this year or early next year. (Golden Ten)